Hello everyone. I am Dilek Aktaş, Teknosa's Head of Investor Relations and Finance. I'd like to thank you for joining Teknosa First Quarter Earnings Webcast. Please refer to our disclaimer before we begin our presentation. Accordingly, I would like to inform you that this presentation on 2025 First Quarter Financial Results includes the company's audited financial information prepared according to IAS 29 Inflation Accounting Provisions in accordance with Capital Markets Board's decision dated December 2023. Our presenter today is Teknosa CFO Mr. Ümit Kocagil. All participants will be in a listen-only mode during the presentation. Following the first part of this call, there will be a Q&A session where you will be able to ask your questions. Please use the chat box to write your questions down. Just to remind you, this conference call is being recorded and the link will be online following the call.
Now, I am leaving the ground to Mr. Ümit Kocagil.
Thank you, Dilek. Hello everyone and welcome to our meeting on the first quarter financial result for 2025. I would like to start by sharing some key highlights of our performance at the beginning of the year. Despite a challenging macroeconomic environment, we remained focused on our strategic priorities and continued to take solid steps going forward. Today, as usual, I will begin by giving a brief overview of Teknosa's first quarter performance and some important KPI realizations. Following that, I will walk you through our year-to-date market evaluation, financial performance, and the initiatives that we are implementing to navigate in this challenging year. Since we published our financials yesterday, I will continue by addressing any questions you may have. As you may recall from our previous calls, we have anticipated a slowdown in the market.
Indeed, rather than the slow-pacing growth, the market has shrunk versus last year in real terms under the effects of heavy economic conditions. Under the light of this explanation, let's look into the key highlights of 2025 year-to-date. Macroeconomic challenges continue to weigh on demand and drive up financial and operational costs. Revenues were impacted by seasonality effect and lower consumer spending, resulting from diminished purchasing power. Nevertheless, EBITDA margin has improved, driven by higher gross margin and disciplined OpEx management. Although financial expenses continued to put pressure on the bottom line, effective measures helped mitigate the impact, leading to improved financial ratios. Networking capital showed year-over-year improvement, supported by ongoing proactive inventory and cash flow management. Finally, demonstrating our long-term commitment to sustainability, Teknosa was included in the BIST Sustainability Index, ranking 10th among 318 global specialty retailers.
Before sharing the operational KPIs on the right side of this slide, just a quick reminder for you. All the figures that are provided in this presentation are in line with IAS 29 standards, which means that figures in prior periods are revised to present March 2025 purchasing power. We continue to expand our number of SKUs, namely stock-keeping units, to meet consumer demand. Since the launch of Marketplace, the number of SKUs has grown 45-fold, reaching 225,000 SKUs, and the number of merchants in our Marketplace has increased to around 1,200 merchants. Marketplace to Teknosa's online channel gross merchandise value is 35%, which is still higher than global benchmarks. Our net sales area is 105,000 sq meters. As part of our ongoing store network optimization efforts, the number of stores has decreased to 172.
The Net Promoter Score (NPS), a key indicator of consumer satisfaction, remained strong at 72, aligning with top global benchmarks. It is important to note that this NPS score represents the average of stores, online services that we provided, and the call center. Last but not least, our TechnoClub loyalty program, which we launched in 2021, has now reached 4.8 million registered customers, further strengthening consumer engagement and brand loyalty. Let's begin by looking at the macroeconomic environment, where ongoing pressures have impacted consumer purchasing power, leading to noticeable shifts in spending behavior, particularly in electronic products spendings. The increase in the minimum wage has not been sufficient to fully offset the effects of inflation, resulting in continued pressure on consumer purchasing power. These dynamics have resulted in a decline in electronic retail's share of wallet.
As shown in the chart below, based on Interbank Card Center data, it has dropped by three percentage points year-over-year from 8% to 5%. As macroeconomic conditions normalize, the share of electronic retail is expected to recover to more typical levels at around 11%. Now let's look at the market performance before getting into details of our financial results. A reputation GfK, the independent research company, follows two consumer electronics markets in Turkey. The first one is the panel market, which represents the total sales of consumer electronic products in Turkey, and the second one is techo nline market, which constitutes a subset of the panel market and includes only the online sales across all channels in the panel market. As I mentioned in previous calls, due to ongoing economic headwinds, market growth has slowed in 2024.
Looking at the market data, the panel market increased by 26% in the first quarter of 2024 versus the same quarter of 2023. However, in the same period of 2025, it declined by 14% in real terms compared to the previous year. A similar trend is observed in the techo nline market, which grew by 27% in the first quarter of 2024 but contracted by 15% year-over-year in the same period of 2025. When we break down these figures by category, we see that, unlike other previous years, in this quarter, all categories have contracted. In the panel market, small domestic appliances (SDA) recorded the smallest decline, while IT and consumer electronics were more significantly impacted. In techonline market, white goods is the least shrinking category, followed by SDA and consumer electronics. IT and telecom face the biggest contractions in the techonline market.
In the coming pages, I will go over the main KPIs on profit and loss statement and the initiatives that we have taken or taking in line with these market conditions. Teknosa's top line declined by 18% in the first quarter of 2025 versus last year due to weakening demand, while we remain committed to optimizing our omnichannel strategy. Weak demand in this period intensified price competition. We strategically focused on profitability-driven growth in selected categories. Revenues were also impacted by the Ramadan period and weakening consumer demand, especially in March. Please also keep in mind that last year's growth pace was quite strong, boosted by pull-forward demand observed in the first quarter of 2024, affected by the local elections, which is also causing the declining ratios in 2025. In this tightening market, we implemented actions to diversify and strengthen our revenue streams.
We continued to improve sales force effectiveness through coaching and performance targeting, supported by our AI-powered tool, Bilge. We also enhanced alternative payment options to better support customer needs and demand. We implemented targeted actions to strengthen our omnichannel strategy, including store-specific performance improvements and optimized marketplace commission structures. Looking at the gross margin at the bottom of the slide, we achieved an improvement of 1.4 percentage points year-over-year, reaching 12.7%. This increase in gross profit margin was driven by a favorable product mix, disciplined promotional activities, and effective inventory management for inflationary accounting purposes. Several margin optimization initiatives contributed to this performance, mainly increasing the share of more profitable categories within the sales mix, assortment optimization across all categories, and ongoing stock optimization to further accelerate inventory turnover days. In this challenging cost environment, with all our efforts, our EBITDA margin increased from 2.5% to 2.7%.
This improvement was driven by the year-over-year increase in gross margin. Despite the decrease in OpEx cost, the OpEx to revenue ratio increased, primarily due to the decline in revenues. We have implemented several cost control optimizations, including optimizing our store network to eliminate operational inefficiencies, reducing costs across rent, marketing, and logistics personnel by identifying saving opportunities. Additionally, in this period, we also focused on transitioning to a new ERP system and successfully made this transformation, which will contribute to enhanced operational efficiencies. We also expanded our retail media revenues, which directly contribute to our profitability. High interest rates and ongoing macroeconomic headwinds continue to impact the bottom line. However, our mitigation measures have proven effective. Credit card commission costs remain the primary driver of financial expenses, with high interest rates continuing to affect us.
Our credit card commission to revenue ratio decreased from 4.6% to 4.3% year-over-year, primarily driven by a more than two-times increase in consumer loan exercise. Accordingly, total non-credit card payments have now reached over 20%, marking the highest level ever achieved. Through this reduced financing cost, we have implemented several strict initiatives. These include ongoing efforts in stock optimization and effective inventory management, ensuring payment terms are aligned with stock turnover ratios. We have also focused on significantly increasing the share of non-credit card payments and optimizing costs further by promoting consumer loans. Additionally, we are minimizing the cost of consumer loans by continuing to eliminate interest-free consumer loans and renegotiating supplier support for free installment to further mitigate financial costs. As a result of these financing optimization initiatives, the net financial expenses to revenue ratio improved year-over-year, decreasing from 5.9% to 5.6%.
As I shared in our previous earning calls, we are placing a strong focus on enhancing financial discipline and managing liquidity. We effectively optimized inventory management, tightened procurement strategies, and focused on negotiating payment terms to balance inventory turnover days and payment cycles on both the category and supplier levels. Additionally, we maintained strong control over daily cash management, supported with disciplined procurement optimization. As a result of these actions, we improved our net working capital, reducing it to TRY 806 million, which represents a TRY 1.7 billion improvement in comparison to previous year. To go the extra mile, we are also introducing AI-based tools to enable smarter assortment planning, demand forecasting, and accelerated stock movement, which will support our efforts in assortment and inventory optimization. Despite ongoing challenges, we remain committed to our investment strategy to transform Teknosa into a digital-first company.
Our total CapEx increased by 21% in real terms, reaching TRY 295 million in this quarter, with 75% of this allocated to our IT and efficiency projects. As part of our digital-first company objective, we are transforming our store network into experience-driven destinations. To date, 71 stores have been successfully upgraded to new digital concepts. In addition, two important digital transformation streams went live on April 1st. The first one is transition to SAP for ERP processes. The second one is implementation of a digital data platform. We have also launched several AI-based initiatives to further strengthen our operations: an AI-based localized assortment management project, which was started in the last quarter of 2024; an AI-based demand forecasting and procurement decision optimization project, which was started in this quarter; and an AI-powered stock speed accelerator project, again started in this quarter.
All these projects have been prioritized to give TechnoSaaS a competitive edge, driving both sales, growth, and operational efficiency, especially in the supply chain. Before concluding my presentation and opening the floor for questions, I'd like to summarize the key points we discussed and highlight our main areas of focus for this year. Briefly, TechnoSaaS is successfully navigating headwinds causing high inflation and interest rates by maintaining a strong focus on well-defined strategies. In 2025, our main focus will continue to be driving revenue growth, especially in complementary products and services, while optimizing mix to further increase gross margin, controlling OpEx costs and mitigating financial costs while offering attractive non-credit card payment options to support consumer demand, maintaining effective inventory and disciplined cash flow management, and investing in AI-driven digital information initiatives and IT infrastructure to enhance operational efficiency and performance.
Lastly, despite the current macroeconomic challenges, we remain fully committed to our long-term growth ambition and strategic CapEx investments. Our vision is to become a digital-first company with sustainability initiatives to create long-term value for all our shareholders. This is the end of my presentation. Thank you for listening and participating in our call. Now, if it's okay for you, we may proceed with your questions.
Before we start taking your questions, I would like to kindly remind you that you can ask your questions through the chat box on your panel. Before making your statement, please kindly introduce yourself and your questions. We'll address one by one, and our IRO, Sibel Turhan, will share your questions with us.
Let's wait for a moment to let them write it.