Ladies and gentlemen, good morning and good afternoon, wherever you are, and welcome to Teknosa's third quarter 2026 earnings call and webcast. My name is Dilek Aktaş, and I am the Head of Finance and Investor Relations at Teknosa. Before we begin, please take a moment to review our disclaimer slide. I would like to inform you that this presentation on the company's third quarter 2026 financial results includes financial information prepared in accordance with the inflation accounting provisions of IAS 29, in line with the Capital Markets Board's decision, dated 28th of December, 2023.
Our presenter today is Teknosa CFO, Mr. Ümit Kocagil. Please note that all participants will be in listen- only mode during the presentation. Following the presentation, there will be a Q&A session, and you will be able to submit your questions through the Q&A box on your screen. As a reminder, this conference call is being recorded and will be available on our investor relations website following today's webcast. Now, I would like to hand the floor over to our CFO, Mr. Kocagil.
Thank you, Dilek. Hello everyone, and welcome to our webinar meeting on the third quarter financial results for 2026. Today, I will begin with a brief overview of third quarter macro and operating context, and highlight several KPI realization. I will then walk you through the recent organization structure, latest market developments, our financial performance, and priorities in coming months to navigate the current macroeconomic environment while strengthening our long-term value creation. Since we have already published our financial results, I will be happy to address your questions during the Q&A session.
Let me start with the key highlights of the third quarter. The main theme for the quarter is sales resilience alongside continued pressure on margins. Intense competition and high financing costs continue to weigh on profitability. On the macro side, the Central Bank maintained its policy rate at 37% in September, continuing a tight monetary stance amid weak domestic demand. Food prices also started to affect the discretionary spending in September. Our online business continued to support sales, while intense competition remained a constraint on margins.
From profitability perspective, operational performance continued to improve over the third quarter of the year. Our disciplined approach to cost management and ongoing efficiency initiatives supported EBITDA margin improvement compared to previous quarters in 2026. Despite these headwinds, Teknosa outperformed both the panel and tech online markets in nine-month period by leveraging its omni-channel capabilities. Our strong marketplace execution, expansion into pure-play platforms, and ongoing improvements in digital traffic, customer acquisition, and conversion rates enabled us to maintain our competitive position despite softer market demand.
Below EBITDA, high interest rates and financial costs, as well as higher borrowing requirements arising from seasonal working capital needs remained the primary factors affecting our bottom-line performance, despite our diversified funding strategy and successful bond and Sukuk issuances at favorable borrowing cost. Finally, we are taking further our operational efficiency projects, digitalization initiatives, and profitability-focused actions with the new management team. Most of you have probably followed our public disclosures on our new organization.
In next slide, I will introduce you the new executive committee organization, b ut first, we would like to thank our ex-management team members for all their valuable contribution and work they have provided to Teknosa. Now, with the new structure, we believe that new team will take us to the next level in our customer lifetime focus. Before moving to the operational KPIs on the right-hand side of the slide, let me remind you that all figures presented today have been prepared in accordance with IAS 29 inflation accounting standards. Therefore, all prior period figures have been restated to reflect September 2026 purchasing power.
Looking at our operational KPIs, our store network currently consists of 136 stores compared to 146 stores a year ago, with the net average sales area increasing to 687 sq m per store. With our omni-channel capabilities, we have approximately 286,000 SKUs with 1,508 active merchants. E-commerce sustained its contribution to our retail business, accounting for 10% of total revenues in nine months. Customer satisfaction also remains strong throughout the period, with NPS score of 70, a key indicator of customer satisfaction, while our TeknoClub loyalty program continued its healthy expansion and reaching approximately 5.6 million members.
As I have already expressed in our previous calls, this score is on top level among global consumer electronics retailers. We aim to go further in customer satisfaction with our new transformation. This is the chart of our new executive committee. Under the CEO, Öget Kantarcı, there are six assistant general managers. Ümit Kocagil, myself, as the Chief Financial Officer. Mustafa Aşkım Akata as Chief Commercial Officer responsible from category management, retail sales, and supply chain. Zafer Özçelik as Chief Marketing Officer. Tansu Öztorun as Chief Operating Officer for İklimsa business unit. Oğuzhan Poyrazoğlu as Chief Technology Officer, and Aslı Gül Dartar as the Chief Human Resources and Sustainability Officer.
As Teknosa, we would like to welcome our new team members once again. Now, let's move to the year-to-date market developments before reviewing our financial performance. For those who may be joining us for the first time, let me briefly remind you that GfK, the independent research company, monitors two different consumer electronic markets in Türkiye. The first one is the panel market, which represents the total sales of all consumer electronics in Türkiye, while the second one is the tech online market, which constitutes only online sales within the panel market.
As the market data is provided with a time lag by GfK, market information is for eight months period. But we have checked the August figures, and growth was also similar at August. During the first eight months of 2026, the overall panel market declined -3% in real terms, mainly due to continued weak sales in telephone and white goods category. However, this decline was partially offset by continued strong performance in the IT category, which remained the primary growth driver of the market. Meanwhile, the tech online market once again outperformed the panel market by delivering positive growth.
Looking at the categories business within the panel market, IT grew by approximately 7%, while consumer electronics increased by around 1%. These categories performed more strongly online, where IT grew by 13% and consumer electronics by approximately 11%. White goods remained the weakest category, declining by approximately 9% in the panel market and 7% in online. This variation across categories reinforces the importance of selective category management alongside our continued focus on online channels. Overall, we continue to believe that the structural growth opportunity between online retail remains compelling.
Increasing digital adoption, broader product availability, and changing consumer behavior continue to support long-term growth in tech online, which remains fully aligned with our omni-channel strategy. Moving to our financial performance. Revenues reached TRY 73.7 billion, which represents a -1.5% year-on-year in real terms, but still beating the panel market contraction at around -3%. Despite heavy competition and the optimization of our store network, Teknosa outperformed the overall market. Meanwhile, third quarter like-for-like sales increased by 2%, providing a more positive indication of performance across comparable stores as we continued optimizing our network.
Strong growth in our online business also remained one of the key drivers supporting overall performance throughout the period. Turning to gross profitability, competition and back-to-school promotional activity continued to put pressure on margins. Nevertheless, our gross margin improved sequentially to 12.2% from 11.9% in the second quarter and 11.5% in the first quarter. This represents continued progress during the year, although the third quarter margin remained below the 13.9% recorded a year earlier. Our priorities remain complementary products, higher margin services, and improved marketplace profitability, supported by a stronger contribution margin focus in commercial decisions.
Let me now turn to e-commerce. For the first nine months, e-commerce revenues reached approximately TRY 7.8 billion, increasing by around 5% in real terms year over year. Considering tech online growth at 2%, we can say that Teknosa outperformed also the tech online market. Looking at marketplace scale, we now operate across 14 categories within 1,508 merchants, an increase of 9% year- on- year. Our assortment compromises approximately 286,000 SKUs, up to 27% compared with the previous year. E-commerce GMV reached TRY 12.3 billion, representing 16.4% of retail GMV, while e-commerce accounted for 10% of total revenues. We remain focused on developing both our first-party and marketplace businesses.
Our transformation agenda also includes improvements to the website and app experience to support this channel. As consumer purchasing behavior continues to shift toward digital channels, we remain focused on strengthening our omni-channel capabilities and expanding our online channels. Turning to operating expenses, our efficiency measures continue to support sequential improvement. OpEx-to-revenue ratio declined to 10.7% in the third quarter from 11.2% in the second quarter and 11.6% in the first quarter, reaching its lowest quarter level this year. For the first nine months, the ratio stood for 11.2%, compared with 11.4% in the same period last year.
Together with the improvements in gross margin, this supported a third quarter EBITDA margin of 4.3%, up from 3.4% in Q2, and 2.9% in Q1. However, our nine-month EBITDA margin remained below last year at 3.5% compared with 4.8%, reflecting the continued impact of lower gross margins. The key message here is that sequential improvement is visible, but further progress is needed to recover the profitability levels achieved last year. Below EBITDA, financial costs remain one of the most important challenge and focus area in Türkiye for all companies, especially for retailers. High interest rates and the use of installment sales to support demand continue to put pressure on credit card commission expenses.
We are addressing this by diversifying payment methods and reducing our reliance on credit card collection. We also continue to renegotiate commission rates with banks where market conditions allow. In parallel, we are expanding alternative payment solutions, including cash collection and consumer finance options, with better commercial terms and greater supplier participation. Our objective is to support customers' purchasing needs while managing the associated collection costs more effectively.
As a result of these initiatives, non-credit card collection share increased by approximately 5% year- on- year, which is mitigating the financial cost. While interest rates remain high, we believe these initiatives position us well for the further improvements once macroeconomic conditions normalizes. Let me now turn to working capital, where we have made further progress during Q3. Net working capital declined to approximately TRY 1.5 billion at the end of September, from TRY 2.8 billion in June and TRY 3.9 billion in March.
This represents an improvement of approximately TRY 1.4 billion compared with June, bringing net working capital to its lowest quarter end level this year. The improvement mainly reflected higher trade payables, which increased to approximately TRY 17.8 billion, alongside a modest reduction in inventories to TRY 17.3 billion. However, net working capital remained positive compared with TRY -1.3 billion position in September last year. So there is still further improvement to achieve.
Turning to financial cost, the net financial expenses to revenue ratio, excluding IFRS 16 adjustments, is to 8.2% in third quarter from 8.5% in second quarter. On a nine-month basis, however, it increased to 7.5% from 6.2% last year, reflecting high interest rates in our borrowing requirements. Despite successfully issued bonds and Sukuk at favorable borrowing costs below prevailing market rates, higher funding requirements led to an increase in our net financial expenses to revenue ratio during the nine months period. This reinforces the importance of improving inventory management and cash generation as part of our transformation agenda.
Turning to net income bridge for the first nine months, our net loss for the period amounted to approximately TRY 2.6 billion, compared with TRY 1.7 billion in the same period last year, a deterioration of approximately TRY 910 million. The decline in EBITDA contributed approximately TRY -540 million to this movement, while higher net credit card and interest-related costs had a further negative impact of approximately TRY -940 million. EBITDA differences was offset by higher monetary gain and tax differences, but higher net financial expenses driven by high interest rates and increased borrowing requirements continue to weigh on bottom line.
Before concluding my presentation and opening the floor for your questions, let me briefly summarize our priorities for the fourth quarter of the year and coming periods. Looking ahead, our priorities remain unchanged. Disciplined execution, operational efficiency, cash management, and sustainable value creation. In this sense, we haven't revised this slide, but we want to further improve our retail muscles, enhance the focus on customers in all our operations through lifetime focus.
With the new approach and the new team, we completed our studies and starting to deploy the initiatives that we are going to share with you next time we meet. We will continue to focus on driving profitable growth through our omni-channel strategy while maintaining a strong focus on cost, stock, and cash management. At the same time, we will further improve our AI-driven digital initiatives and invest selectively in projects that strengthen our long-term competitiveness. This concludes my presentation. Thank you very much for your attention. Now, if it's okay with you, we may proceed with your questions.
[inaudible] Before we begin taking your questions, I would like to kindly remind you that you can submit them through the chat box on your screen.
There is also the question, Mr. Asif, from Erkan Edincik regarding our adjusted equity. Erkan , I can just answer these questions like this. Under the current legal framework, the company's equity remains sufficient under the temporary relief provisions of Article 376 of the Turkish Commercial Code, which is effective and extended until 31st December 2026. As of the date hereof, no decision has been taken by the relevant corporate bodies regarding a capital increase for the year 2026. As Teknosa management, our focus remains on navigating the current market environment effectively, strengthening our financial performance, and continuing to create sustainable value for all our stakeholders.
Are there any further questions?
Hello. Actually, I just raised my hand, but—
Yes, could you please write your questions on chat box?
Okay. Sorry.
You asked the question in Turkish, but I can answer it in English because we are just publishing this one on our website so that foreign investors are also checking it. That is why I am just going to answer it in English, Yusuf Bey. Yes, as you say, and I also try to express during my presentation, the credit card commission is the main factor that is just affecting all sectors, especially retailers in our sector. Because normally abroad, as we said, there are no free installments for the credit cards, but in Türkiye, there are some habits that are just continuing currently. With the credit card, normally, you can just have some free installments.
Under this high interest environment, it is just creating a big burden for all the retailers such as we are, and also such as for our competitors in the sector. But all the time, we are just trying to manage this one by optimizing our installment numbers and also with the negotiations and hoping that in the future, after the 35% threshold that we just many time communicated, it will be just beneficial for the whole sector.
There is a new question.
It is okay for you, Yusuf Bey? I guess Erkan Bey has another question.
Yes, but before this one.
Erkan Bey, I am not very clear about the question. Can you just elaborate it a little bit? Erkan Bey, can you hear us? Yes, Erkan Bey, just—
There is a question from Eren Bey.
Let me just handle the question of Erkan Bey. He is not hearing us as far as I understand, but as far as I see, he is just talking on the group companies, Sabancı Group. I guess he is talking about the split or exposure from Akbank, I think. On our side, there is no big change, actually. We are just handling all our negotiations with the bank as Teknosa management. So there is no big major change or big change or diversification on our side, I can say about this one, Erkan Bey. Eren Bey has a question, I guess. Erkan Bey— Eren Bey, in the presentation, I just tried to explain that normally credit card is the main collection methodology for all retailers, b ut now with the high interest environment, we are just trying to just mitigate the ratio.
We are just pushing for the cash collection and also the consumer loans. In this sense, we are just managing to obtain a lesser, let's say, collection amount for the credit cards. We did not just clearly say what is the ratio, but you can understand that it is the main part for us. Our competitors are not, as you know, we are the only company that is just publicly open. We are just giving the information, and our competitors are just using this information against us in this sense. Sorry to not answer your question, but you can understand that we are trying to diminish the ratio of credit card usage in our collection methodology. Is it okay for you, Eren Bey?
Okay.
You also ask whether we just plan to offer longer installments under this heavy interest environment. It is tough, but we are also just checking the, let's say, purchasing power of our customers. In this sense, we are all the time making some negotiations with the banks and also with the suppliers in order to just ease the interest burden for the bank loans. We will just continue optimizing our cost, by the way. Is there other question? Sevil.
If there are no further questions, thank you all very much for joining today's webcast. Ümit Bey, I would now like to hand the floor back to you for your closing remarks.
Thank you all very much for joining today's earnings webcast and for your continued interest in Teknosa. We appreciate your time and your valuable questions. Thank you and have a great day.