Ladies and gentlemen, thank you for standing by. I would like to welcome you to Doğuş Otomotiv's earnings conference call on the 22nd of August, 2023. Please note that today's conference call is being recorded. After the call today, there will be an opportunity to ask questions. At this time, I would like to turn the call over to Mr. Kerem Talih, the CFO. Please go ahead, sir.
Thank you very much, Michael. We are welcoming all the participants to our analyst briefing presentation, and with our greetings in the name of all Doğuş Otomotiv finance team. We are really happy to be able to present you such a successful and brilliant performance of our company, both in terms of profitability, in terms of market share, and operational results, and also in the eye of sustainability. I am happy to be able to say that all the rumors or question marks relating to the performance of Turkish automotive markets is to be in this year, considering that in the first quarter of the year, we are going to have elections and some macroeconomic policies may have some adverse effects to the expansion of the automotive market.
Considering that at the end of July, we have almost reached 700,000 units, and at the end of June, we have almost touched 600,000 units, we can say that most of those doubts have been eliminated. Within which, as a distributor of Volkswagen Group of brands in Turkey, we have increased our sales to a figure more than 80,000 units. For the moment, we are definitely about 95,000 units together with Škoda. Knowing that Doğuş Otomotiv Group is the widest dealer network among all brands, we have increased our customer touchpoints on a yearly basis by adding 33 new points and reached a level of 665 customer touchpoints. One of the biggest obstacles that we have been talking through last year was our supply and sustainability problems in our commercial vehicle segment.
As you can see, we have more than doubled the performance of the availability of those vehicles, and our sales figure has increased to a level of more than 10,000 units. Not only Doğuş Otomotiv, our associates have also prevailed significant success, within which they have almost increased their profit contribution to a level of 300% to a level of TRY 1.4 billion . Among which, the total net profit, consolidated net profit of Doğuş Otomotiv Group, together with our subsidiaries and associates, has reached to a level of TRY 9 billion . As a result of this performance, our stock return on a yearly basis has reached a return level of 135%. By the liquidity availability, we are going to be granting TRY 2.5 billion advance payment to our shareholders, effective from this Thursday.
Having a glance at the performance of the market, as I have said, it has almost reached to 600,000 units. As you can see in the presentation, only in the passenger vehicle segment, the performance of Doğuş Otomotiv is a bit, or slightly less than the performance of the expansion of the market. But in other segments, including premium light commercial vehicles and heavy commercial vehicles, our performance is definitely much better than the performance of the market. At the end of June, our total sales has increased 52% and has reached to a level of more than 78,000 units. Just to repeat once more, our availability and sales performance, both in light commercial vehicles and heavy commercial vehicles, is much above the performance of the market, as you can see in the presentation.
In terms of market share allocation, as you can see at the bottom part of the presentation, the allocation in this subject has not changed as compared to the end of the year. We are still keeping our third level, with a degree of 13.9%, which is slightly lower than the performance of the previous year, considering that our competitors have also embraced their obstacles relating to vehicle availability. In the passenger vehicle segment, as you know, Tofaş, the consolidated Tofaş and Stellantis Group is the leading market share group with a level of 37%, which is followed by Renault and Doğuş Otomotiv, respectively. In the light commercial vehicle segment, Ford here is on the table, definitely, and following Tofaş with a market share of 20%, almost 30%.
Within that area, our brands are representing a market share of 6.7%, which is relatively higher than the performance of the previous year. When we just consider the performance on brand basis, as you can see in both brands, when you consolidate them all, which encompasses the consolidated Volkswagen Group in Turkey, our total sales is 58% higher than the previous year. Here, the leading brand is definitely the Volkswagen passenger cars, which is followed by Škoda and Audi, and light commercial vehicles, respectively. But important point here worth noting is the performance of our luxurious brands in Porsche, Bentley, and Lamborghini is much above the performance of the previous year. Also, as you can see in Scania, our brand management has really made a great job, which enabled us to sell 1.6 thousand units of Scania trucks in Turkey.
Knowing that July market information has already been revealed, as I have said in the beginning, the total market size has almost reached to a level of 700,000 units, which is 62% better than the previous year. Among which, the consolidated performance of Doğuş Otomotiv is even 2% better than the market itself. In its details, the general tendency is almost the same as the performance of the June result. In that respect, I am not going to the deep details of this issue. Having a reflection of those operational performance into financials, as we have revealed our financials yesterday in the evening. Luckily, I can say that we are getting the positive comments and notes from both stakeholders, within which our revenue has reached a level of TRY 47 billion , and respectively, our EBITDA and net profit margin has increased more than 200%.
We are still continuing our capital expenditures and investment in line with our investment strategy. Within that, as you can see, in line with the increase in the sales volume, we have increased the size of the balance sheet, which is mainly stemming from the increase in the working capital, as you can see, to a level of TRY 22 billion . As you can see, almost 75% of the total balance sheet of the Doğuş Otomotiv consolidated financial statements is computed by working capital, namely cash receivables and inventories. Coming to margins, which has always been under close investigations, or let me say, investigations or analysis.
Our gross profit margin at the end of June is still above the performance of the previous year at a level of 24%, which is computed by the gross profitability of new vehicle sales, spare parts sales, and used car and other activities under the umbrella of Doğuş Otomotiv. Our OpEx over sales is considerably at a low level, knowing that the total turnover has increased tremendously. We are still managing our general administrative employee and marketing expenditures, really on a very controlled manner. In nominal terms, of course, they are increasing in line with inflation and with the adverse effects of devaluation of Turkish lira, which there is no way to escape from this. As a result, our EBITDA and EBIT margins has increased to levels that you can see in the presentation, about 20%.
Luckily, in line with the disciplined strategy and control of our financing costs, and by keeping our open position as low as possible, our net profit margin has reached to a historical highest level of 19.4% in an area that we have sold almost 62,000 units at the end of June of this year. This is a new page only for this presentation, or this is the second time? Yeah. Thank you. This is the second time that we are sharing with you the details relating to the divisions of our gross profit on division basis. As you can see, in terms of the allocation of our revenue, more than 70% is stemming from passenger car sales segment, 17% is stemming from commercial vehicle segment, and 12% is stemming from other segments, namely after-sales services, spare part sales, and used car sales, mainly.
Relating to the gross profit allocation. As you can see, of course, the passenger segment is the leading one, and almost revenue division and gross profit division of the commercial segment is almost the same, which is followed by the other segment. On segment-based gross profit margins are respectively 22% for passenger cars, 26% for commercial segment, and more than 30% in the other segments. I must here note that the gross profit margin of spare parts is the major component in the other segment. Having a glance at the income statement. In this page, as you know, we are comparing the quarter, the performance, as compared to the first quarter of this year and the same quarter with the previous year.
In the second quarter of this year, our sales performance is 48% higher than the previous year and 34% higher than the first quarter of this year, which has reached a level of TRY 27 billion . Our total operational expenditures has increased as compared to previous year. Here, I must note that the net of effect of the sale of our Bursa facility to a member of our dealer network and the related profit contribution has served for the positive sake of this P&L item. This is valid both in comparison to the previous year and both in comparison to the first quarter of this year. As you can see, an important item here is the income from investing activities. More than TRY 700 million is coming from investing activities.
This is also relating to almost TRY 500 million of it is out of the TRY 738 million is stemming from the profit out of the sale of the Bursa facility. As important as it is, the income from associates has reached a level of more than TRY 650 million . Here, as compared to the previous quarter, there is a slight, namely 15% decrease, which is stemming from the performance of vdf associates, namely in vdf filo, the tendency of the used car prices downwards has an effect on their profitability, and also the pressure on the interest rates has just lowered their margin in that respect. The second quarter's performance is slightly lower than the performance of the first year. Financial income and loss at the net is TRY 1.3 billion .
We will come to the detail of this figure in the following slides, but which is mainly computed by FX loss of the investment credit and also our interest expenditures. At the end, we have acquired TRY 5.1 billion by the performance of the three months of this year. Having a glance of the P&L on a semi-annual basis as compared to previous year. As you can see, our total revenue has reached a level of TRY 47 billion , 150% higher than the previous year. Our total operating expenditures, repeating once more, by the net of effect at the sale of the Bursa plant has also set for the advantage of this figure. By the adverse effects of inflation and also devaluation, and also adjustments of salaries and white- and blue-collar employees has increased this figure to a level.
As all the companies in Turkey, we are also having the adverse effects of the inflationary environment. Income from investing activities, as I have said, out of this TRY 900 million, TRY 500 million is stemming from the sale of Bursa plant. Income from associates, as you can see, has definitely increased almost 300%, which has reached a level of TRY 1.4 billion . After financial and tax expenditures, our net profit of the year has increased TRY 9 billion , which is the nominal highest historical record level in the history of Doğuş Otomotiv. Having a glance at the performance of our associates, as you can see, the performance of Yüce Auto, which is the Škoda dealer in Turkey that Doğuş Otomotiv owns 50% of it, has increased the level of almost TRY 800 million .
Within Yüce Auto, with our shareholder, Yüce family, we are really taking care of a very successful business, which has resulted in such a high volume of profitability. As you can see in the presentation, all of our associates have increased their performance. After Yüce Auto, vdf and TÜVTÜRK are the next big players in our consolidated structure. Having a look at the balance sheet, as you can see, by the increase in working capital components, mainly increase in the trade receivables and inventories, which is definitely an inevitable result or natural result of the expansion in the sales volumes, total balance sheet has increased to a level of almost TRY 38 billion , which is also followed by the increase in our liabilities. As you can see the detail in the right part of the presentation under the heading of borrowings.
You can see that interest bearing long-term borrowings at a level of TRY 3.5 billion , which is computed by the EUR 150 million worth of long-term borrowing, which has been utilized to be able to buy the shares of Doğuş Gayrimenkul Yatırım Ortaklığı, has increased our borrowings level to a level of TRY 6.5 billion . We just consider without it. In the first line, as you can see, the bank liabilities, in total, it has only increased from TRY 2.3 billion to TRY 2.7 billion at the consolidated level. As you compare the expansion in the total working capital, we are definitely taking advantage of the increase in the working capital turnover. Without increasing the liabilities so much, we are able to retain and turnover our working capital requirement. Coming to the detail of financing costs. As you can see, interest expense on borrowings.
In terms of Turkish lira perspective, it has increased TRY 102 million , but mainly it is stemming from the additional interest cost of the new loan of EUR 150 million . Foreign exchange loss is also stemming from this investment loan. As you can see, the rest of the financing cost items are relatively in line with the market developments. Coming to financial performance in terms of turnovers. As you can see, we have almost keeping the same level of even two days better performance in receivable turnover. Inventory turnover in terms of days has increased from 43 days to 69 days, which is a result of the expansion of our sales performance. As you can see, our payable turnover is almost same as the previous year.
In terms of capital expenditures, we have new investment areas, both in terms of IT area, new test cars in D Power and so on, so forth, which is also influenced by the increase in the inflation. The devaluation is also playing here a key role. As a result of these operations, in terms of financial perspective, our return on assets has increased to a level of 24%, and return on equity has reached to a level of more than 47%. Coming to what's new. I will just keep those parts short since they have already been publicly announced that we are going to import MEILLER tippers, and we have already started to sell them. As some of you might remember, many years ago, we were the importer of this brand.
Then we set up a joint venture and set up a factory in Sakarya in Turkey. But after the downsize in the market, and mainly with the adverse influence of the 2018 and 2019 crisis, we have liquidated the company. But since we are still continuing to sell Scania trucks, and knowing that tippers are a complementary product, we have started to sell MEILLER tippers. We have revealed our sustainability report recently. I can say this is now an integrated report which covers financial information and also sustainability information. Also we have applied to Capital Markets Board of Turkey.
To be able to buy the preferred stocks of Doğuş Gayrimenkul Yatırım Ortaklığı, we have made the official application to the Capital Markets Board of Turkey. In general, relating to sustainability, this page is the same as the previous, so I don't have to add more on that. But mainly under the heading of highlights, there is recent developments that we would like to share with you under the heading of environmental, social, and economic perspective. We are proud to be able to announce that our Scania brand has been selected in the Scania Green Dealer development program. Doğuş Otomotiv has been selected as the pilot country for the Volkswagen AG sustainability retail program. We have also made an application for the Zero Waste Certificate application, among with this country program of Volkswagen AG.
In terms of social perspective, we are still very keen on and continuing our education and development programs under the heading of human rights. We are still complying our education programs in terms of in-company compliance rules and regulations. We are not only doing this for our own employees, but we are also giving those related compliance educations within the body of our authorized dealer network, since they are very important participants of our total Doğuş Otomotiv family. Coming to year 2023, expectations are in terms of mobility, digitalization, sustainability. Here, I would like to note that our continuous works and investment program under the heading of D Power, sorry, is continuing.
Just to refresh your memory, we have set up a new company, which is 100% owned by Doğuş Otomotiv, which is going to make the infrastructure and retail management and investment policies of electrical vehicle charging stations among Turkey, which will serve for the all brands in Turkey under the umbrella of Doğuş Otomotiv. Coming to the figures, we have increased our total automotive market size to a level of 1 million units. Together with Škoda, our total sales performance, 110,000 from Doğuş Otomotiv and approximately 30,000- 35,000 units together with Škoda. Our total sales units is going to reach the level of almost 150,000 units. We will be keeping our investment expenditure to a level of TRY 2.3 million , both in terms of renewable energy, machinery, equipment, test vehicles, so on and so forth.
I just try to keep the presentation session as brief as possible for you to be able to ask your questions if you have any. So me and my colleagues are more than happy and ready to be able to help you if you have any questions. Thank you very much for listening to me.
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 you are dialed in via the telephone, please press star two on your keypad. That is star two on your keypad for any voice questions. If you are dialed in via the web, you may also press voice question button for any questions. You may also ask a text question as well. Our first question comes from Mr. Cemal Demirtaş from Ata Yatırım. Please go ahead, sir. Your line is open.
Thank you for the presentation, Kerem Bey, and congratulations for good results. First, my questions again about the demand side. We see that you also revise up your estimates which is a little bit slower than our estimate, but still it's a revision. I would like to understand the demand especially in July. We still had strong volumes. How do you see the outlook in August and September? Any indication in the queue? Because we closely know that many people are waiting for buying cars from you, and there's an order book. It looks like it's full. Do you see any change in that front? Maybe it could give us some idea about the following quarters. Thank you.
Thank you very much, Cemal Bey. Yeah, this is an issue that you have underlined relating to our expectations relating to demand is definitely very important for the last four to five months of the year. As compared to what has been happening on May or June, or even as compared to July, I can say that in the total market, I am just speaking in the name of total market, not for our brands. The demand has somehow been relatively normalized. For example, if you just would like to buy an Audi Q3, in each dealer, there is still a waiting list of more than 100 people. But if you just would like to buy a Volkswagen T-Roc or Taigo, in a couple of days maybe, you may be able to buy it immediately.
But I can definitely note that even under those circumstances, current level of demand is definitely so strong in that perspective. With this forecast view, we have increased our forecast of the market size to a level of 1 million units.
Do we see price increases lately, or should we just keep relating to the Turkish changes?
The coming months' performance probably would be lower than the performance of the monthly performances of June and July. Definitely, knowing that there has been some regulation change for the vehicles of the used cars, knowing that the sales price of the used car cannot be higher than the original new car price. It cannot be resold within six months if it is less than 6,000 km, so on and so forth. Knowing that the oil prices have increased significantly, and by the devaluation of Turkish lira, the key term price of the vehicles has considerably increased. In that respect, the performance of the months to come would be relatively, probably lower than the performance of the previous months.
If you just forecast the yearly performance by just considering the performance of the first half of the year, the result is a market size of TRY 1.5 million . Sorry, 1.5 million units. Knowing that the normalization of demand, we have just revised our forecast to a level of 1 million units.
Thank you, Kerem Bey.
You're welcome.
Okay, thank you very much. Our next question comes from Erim Isparta from Ata Portföy. Please go ahead, sir. Your line is open. Please go ahead, Erim. If you have a question, please go ahead. We can hear you. Okay. It looks like Mr. Erim dropped the call. Just once again, a reminder, if you have any questions, please press star two. That is star two for any questions. Okay, we have a question from Mr. Evren Gezer from TEB Yatırım. Please go ahead, sir.
Hi. Thank you for the presentation. Kerem Bey, you mentioned that the market is now normalizing. My question is regarding your margins. Where do you see your margins are heading now, and what would be the normalized levels in the coming months or quarters or years? Thank you.
Let me come back to the margins page in the presentation. If you just would give me a couple of. Financial performance on the next slide. Oh, okay. Good.
In the first six or four months of the year, gross profitability of new vehicle sales is 24%. Even in July, on a monthly basis, it was still 24%, which is the highest level on a monthly basis among the year. We have recently made a forecast study within which it will be around 15%, but from brand to brand, it may vary between 12%-17%. Knowing that this, in quotations, this crazy demand is not on the market anymore, we believe that on a yearly basis, we may be able to keep a level, which is hopefully more than 18% on a yearly basis. Hopefully.
This is for 2023, right?
Yes.
For the next year, you have any thoughts or guidance on that?
Yeah, I have many thoughts. I have many thoughts. It is difficult to make some predictions in such an environment. But the years in between, effective from the March 2020 year, we are definitely experiencing totally abnormal conditions, which has started with the vehicle unavailability in the automotive sector, mainly stemming from chip crisis, and so on and so forth, and some sustainability problems, so on and so forth. Which has then turned out to be a kind of crazy demand structure in Turkey, knowing that buying a car is interpreted as an investment instrument, and everybody has just tried to buy a vehicle before the elections. Which is still going on, because in March, there is one more election, and some macroeconomic policies may be changed in a way to downsize or to pressure the demand.
To demand, not demand for vehicles, but demand in all perspectives to be able to combat with inflation. We cannot see in the presentation, but the sustainable gross profitability performance of Doğuş Otomotiv is on average, was around 12%-14% in 2020, before 2020, in 2018 and 2019. So we will see. I cannot specify something specific for 2024.
Thank you very much.
You are welcome.
Okay, thank you very much. We will give one more chance for any additional questions. Please let us know if you have any additional questions. Star two on your keypad, or you can ask a voice or text question on the web. Okay, looks like we have a follow-up question from Mr. Cemal Demirtaş from Ata Yatırım. Please go ahead, sir.
Kerem Bey, regarding the financing environments, do you see any changes in positive or negative pay during the last two months, compared to previous months? The central bank's actions or the bank regulations.
You have some transactions like imports and local sales in maybe working capital issues. It is always valuable to hear your views on the developments. We also.
Thank you very much.
Appreciation on that front. Thank you.
Thank you very much, Cemal Bey. I specifically would like to thank you because this was a point that I was planning to underline, but I might have skipped in the details of the presentation. It is for such a valuable. I must say that this is a period, in terms of liquidity and in terms of financing, this is one of the most liquid periods of Doğuş Otomotiv. In the trust page of the presentation, you can see that the working capital of the company has reached to a level of TRY 22 billion . For example, as of now, our total liquidity in terms of Turkish lira has increased, not consolidated level, only for sole Doğuş Otomotiv level, has increased more than TRY 7 billion . We are carrying of a working capital loans at a level of TRY 1.9 billion .
More than 50% of this portfolio, of this borrowing portfolio, has been renewed within this year. The minimum maturity in those renewals, which used to be one month, has increased to three months, and recently has increased to a maturity of six or even more than six months. So in each renewal, we are able to roll over our current debts. Even we have more than sufficient liquidity to be able to close all these borrowings. This is our financing structure. In terms of foreign currency transactions in the market, as all you are aware of it, mainly till the elections, we have experienced an interesting period that we were not able to buy the required level of current currency in the market. All these challenges, I can say, is totally over.
For the moment, we are able to buy and import our vehicles when needed on a daily basis with no problem. We are totally out of it. That is it from my side, as a reply to your question.
Thank you.
You are welcome.
Okay, thank you. We will just give another few seconds for any additional questions before concluding the call.
Okay, done. Michael, I think
Yes. There are no further questions.
We have clear.
Further questions.
Yeah.
Passing the line back to you, Mr. Kerem, for your concluding remarks.
Okay. Thank you very much. What myself and my team is feeling is that as long as there is not so many detailed questions, we feel that the presentation is sufficient enough. More important than that, the operational and financial performances of Doğuş Otomotiv does not need to be explained in that respect. Figures are talking, and we don't need to talk so much. This is just kidding, but thanks for your time, for your valuable time for listening us. Myself and my team, we are always ready to help you anytime. You know how to reach us. So thank you very much, and have a nice day.
Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.