Hello, everybody. This is Beste. Welcome to Ülker Bisküvi Q1 2026 earnings release webcast. Here with me in room, our CEO, Mr. Özgür Kölükfakı, and our CFO, Fulya Banu Sürücü. I now leave the ground to our CEO, Özgür, for the opening remarks and initial thoughts. Özgür , please.
Thank you, Beste. Good morning, good afternoon, and good evening, everyone, wherever you are. Thank you for joining Ülker Bisküvi 2026 Q1 earnings call. I'll walk you through our results, strategic progress, and our roadmap for the rest of the year. First, I'll start with the key highlights, then review operational and financial performance, and close with our outlook for 2026 growth plan. We'll take questions at the end. Looking at the key highlights, 2025 was a resilient year despite softer demand and regional challenges. 2026 has started in even a more challenging context in terms of both geopolitics and macroeconomy. Despite this challenging environment, we continue maintaining our leadership in Türkiye and strengthened regional competitiveness even more.
Innovation scaled strongly, contributing meaningfully to growth, and balance sheet discipline remains as a core strength. Looking at the macroeconomic highlights, this slide is important because it explains why we, as the management, focus in 2026, is not simply growth, but quality of growth, cash discipline, and protection of earnings. Macro environment in Türkiye remains challenging. Inflation is still high at around 31% as of March 2026. As you can see the details, education is the top of the league with 52%, rent is 42%, and food inflation is 32%. It is really elevated. At the same time, consumer confidence is stable, but not yet strong enough to support a broad-based discretionary demand recovery. The implication of our categories is clear.
Consumers are still buying trusted brands, but they are more selective on basket size, price points, and promotions. This is why our commercial actions in Türkiye are more granular than in the high inflation period of 2022 to 2024. Today, we are in a more disinflationary environment. That means large and frequent pricing is harder, and the consumer is more sensitive to affordability. Q1 's 2026 numbers should be viewed against this challenging environment. We emphasize volume resilience, the role of the international portfolio, and the balance sheet capacity to manage volatility. Here we share our key messages of today. Firstly, we delivered TRY 1.6 billion net income, demonstrating our ability to protect earnings despite a highly volatile operating environment. This reflects the strength of our operational model and disciplined execution.
On the top line, consolidated volumes remained resilient at 182,000 tons. Importantly, our confectionery business is slightly growing year- on- year, even as overall market demand softened. In Türkiye, our core categories continued to perform resiliently, supported by the strength of our strong portfolio and consistent in market execution. Our international operations were a standout, delivering 8.8% volume growth, showing strong momentum despite ongoing regional geopolitical tensions. On profitability side, we maintained disciplined margin management, and we are closing the quarter at a 15.1% EBITDA margin. This reflects mainly timing impacts on cost and inventory rather than any structural change in our earnings capacity.
Finally, our balance sheets remain solid with around 70% of debt structured for long term, while working capital dynamics are largely driven by inventory timing effects. Overall, this quarter once again demonstrates our ability to navigate volatility while protecting both growth and profitability fundamentals. Looking at the new product launches, we are accelerating innovation in Türkiye and internationally. Some of the launches you see on the screen. These launches strengthen our core, expand into new spaces, and keep us ahead of consumers' expectations. This is how we drive growth: faster innovation, sharper execution, and strong brands. This momentum will continue in years to go. Now let's look at the Q1 revenue details. Innovation continues to be a meaningful growth driver for us.
In the Q1 , new product launches contributed 9% of our total snacking revenues, led by a strong 10% in domestic markets and 6% internationally. This reflects both the scale and pace of our innovation engine, particularly in our core markets. Overall, we are building a more innovation-led growth model with NPDs becoming an increasingly consistent contributor to top-line performance. Sustainability is a core driver of our long-term growth and resilience. We maintained our number 1 position in the LSEG, London Stock Exchange Group ranking, and strengthened our climate and supply chain strategy with a CDP SEA rating. Our ESG performance places us in the top 3% globally, and we were ranked in the top of the list, third year in a row. We have completed our transition to 100% recycle-ready packaging.
In our value chain, Beyond Cocoa and Beyond Hazelnut programs continue to scale, supporting farmers, ensuring deforestation-free sourcing, and strengthening resilient supply chains. Looking ahead, we are advancing our 2050 net zero commitment and executing our decarbonization roadmap in line with our SBTi commitments, turning sustainability into measurable long-term value creation. We continue to earn strong external recognition across sustainability, people, innovation, and stakeholder engagement priorities. We supported the Ramadan celebrations at the Heart of Education Project, implemented across all 81 provinces under the leadership of the Ministry of National Education of Türkiye. We hosted our Minister of Industry and Technology, Mr. Mehmet Fatih Kacır, at our Ülker Gebze factory, one of the key hubs for our digitalization and technology investments as well as our Industry 4.0 applications.
We ranked first in the LSEG ESG performance evaluation conducted by the London Stock Exchange Group, as I mentioned before. We were selected in the snack category of Turkey's Happiest Workplaces survey for the fifth year in a row. We were top of the list. According to the assessment of the Equal Pay International Coalition, we became the first company in Turkey to receive the Equal Pay Certificate among all companies with more than 5,000 employees. In S&P Global Corporate Sustainability Assessment, we managed to be in the top 3% among food companies. We received the Syndicated Loan of the Year award from the financial institution of GlobalCapital. We have continued to strengthen our employer brand and people agenda through impactful initiatives across talent, performance, culture, and recognition.
Engagement in internal platforms and programs has significantly increased, while strong participation in flagship talent initiatives reflects our attractiveness as an employer. At the same time, we have reinforced disciplined performance management and maintained competitive reward outcomes. We have also fostered a strong sense of belonging and culture through company-wide engagement moments while continuing to invest in future leadership pipelines. These efforts are complemented by consistent external recognition, positioning us among leading employers both in Türkiye and globally. Now, let's dive into our operational performance. The operating story of Q1 is mixed, but it is also very important. Türkiye remains soft from a demand perspective. International markets show volume-led momentum, although not all regions contribute in the same way. The key is that the portfolio is diversified enough to manage these differences, and our operating model gives us several levers across regions, categories, and channels.
Türkiye confectionery market has shifted into a structural volume decline with -2.5% in 2025, and what we have seen is -2.4% decline in Q1 also in 2026. As you can see, the markets remain soft in the volume demand perspective. This trend reflects a clear behavior shift in consumers. Discretionary spending is tightening, with budgets increasingly redirected towards essentials and savings. As a result, non-essential FMCG categories, particularly chocolates, are disproportionately impacted. In this context, the market outlook requires sharper focus on value delivery, affordability, and portfolio resilience rather than relying on volume-led growth. This slide shows why geographic diversification is a core part of the Ülker investment case. The Q1 was of a uniform story across markets.
Türkiye revenue declined by 5.88%, EBITDA declined by 27.7%, reflecting soft domestic demand and margin pressure from cost timing. Türkiye exports also remained under pressure, with revenue down 1.4% and EBITDA down 30.1%, mainly driven by the weak correlation between Forex and inflation. At the same time, international operations provided important volume and revenue support. Middle East revenue grew by 6.4% in local currency, EBITDA declined by 21.8%. In late 2025, the Saudi FMCG market experienced a sharp contraction, the consumer became more value conscious. While the top line is improving, we remain disciplined on margin and brand investment. Revenue generating from our North Africa business grew by 18.2%, a much smaller EBITDA decline of 3.2%.
This is broadly consistent with the more constructive consumer backdrop in Egypt, where inflation has cooled and volume demand remains positive. Central Asia delivered 23.9% revenue growth, EBITDA was slightly lower. The Uzbekistan establishment, reflecting deliberate market building investments and the timing of phasing spending, is one of the key elements of our Central Asia strategy. Türkiye is still the largest contributor, we are very focused on protecting profitability here. The international footprint gives us optionality, scale, and local growth platforms. The right interpretation of this slide is therefore not simply region by region growth. It is how a multi-market portfolio helps us manage a volatile year. Let me briefly turn into Uzbekistan, which we see as one of the most strategically important growth engines in our international portfolio.
The market combines scale and strong fundamentals with a large and young consumer base and a modern trade environment that is still developing, creating a long runway for structured category growth. In Q1 of 2026, our approach was deliberately brand-led and focused on building the market. We progress on three clear levers. First, innovation. We supported the agenda with one new NPD, ensuring fresh news and stronger reasons to buy in the market. Second, brand demand generation. We delivered two brand campaigns with an integrated mix across outdoor, digital, and consumer-facing touchpoints. We also continued disruptive commercial advertising as a visible lever, reinforcing salience and accelerating consumer recruitment. Third, route to market.
We sustained strong trade activity across channels and we focused on direct distribution in Tashkent, while out of Tashkent we focus on the establishment of our route to market through distributors. Overall, we are building Uzbekistan for the long term through innovation, brand investment, and route to market expansion, so it becomes one of our most meaningful international growth contributors over the coming years. This slide shows the revenue architecture of the business. In the Q1 , total net revenue was TRY 33.9 billion on an IAS 29 adjusted basis. Domestic operations accounted for TRY 24.5 billion or 72% of the total. International operations accounted for TRY 9.4 billion, which is 28% of the pie. At first glance, you may see this as a Turkey-led company with international exposure.
That is true, but it is not the full story. The international portfolio is now broad enough to matter in the quarter-to-quarter balance of the business. The Middle East, North Africa, Central Asia, and exports each play- [audio distortion]
Please go ahead. We can hear you.
Okay. Let me start from the beginning of the slide just in case we don't miss any key messages, because I'm not sure where the line was broken. This slide provides the revenue architecture of our business. In the Q2 , our total net revenue was TRY 33.9 billion on an IAS 29 adjusted basis. Domestic operations accounted for TRY 24.5 billion, which is 72% of the pie, and international operations accounted for TRY 9.4 billion, which is making 28% of our revenue. At first glance, you may see this as a Turkey-led company with international exposure. That is true, but it's not the full story.
The international portfolio is now broad enough to matter in the quarter-to-quarter balance of the business. The Middle East, North Africa, Central Asia, and exports each play different roles. Middle East provides scale, but with some current consumer and market pressure. North Africa provides growth and improving market conditions. Central Asia provides market building potential. Türkiye exports extend the reach of our manufacturing base and brands. In the Q1 of 2026, we still see pressure in Türkiye, but international volume momentum helped offset some of that weakness. That's exactly why diversification is strategically valuable for our business. Market share is one of the best indicators of brand strength in a difficult demand environment. In Türkiye, Ülker continues to hold leading positions across core categories, including biscuit, chocolate, and cake. The slide shows strong value share positions with particularly important scale in biscuits and chocolate.
The reason this matters in 2026 is that when consumers become cautious, they do not simply leave the category. They become more selective. They may trade down by buy smaller packs, respond more to promotions or reduce frequency. In that environment, trusted brands with broad distribution are better positioned than smaller competitors. This is why we continue to invest behind visibility, innovation, and Price Pack Architecture. Internationally, we do not have the same [audio distortion] Asia, and we should not present the portfolio as homogeneous. Across the Middle East, North Africa, and Central Asia, we have strong category platforms that can support long-term growth.
We are still holding our number 1 leadership position in Türkiye, Middle East, and North Africa. Market share gives us the right to price, the right to innovate, and the ability to defend shelf space. In a high-cost environment, that is a critical advantage. Now I'm leaving the ground to Fulya, our CFO, to take us through the financial performance.
Thank you, Özgür . Good morning, good afternoon, and good evening, everyone. Thank you for joining our Q1 financial results meeting. Before I go in more detail, page 1 by page, I'd like to summarize our financial performance in a couple sentences. We have shown that Q1 2026 shows earnings can be protected in a very volatile environment. Strong balance sheet. We again closed this quarter with a very strong balance sheet, strong net-net EBITDA numbers, and all the debt maturity is long-term, gives a great flexibility to the company. Working capital volatility is mainly timing rather than a collection and solvency issue.
The bridge between Q4 and Q1 shows a recovery on key KPIs, as we had shared with our investment community is that we were going to do beat Q4 2025, and we had a good start of the year. Let me take you go through one by one over the coming slides through our financials. Q1 consolidated results shows a resilient operating performance. Yes, we accept there is a margin pressure versus last year, but total volume, about approximately 182,000 tons, broadly flat year-on-year. Total revenue decreased by 3.9%. Gross profit, 19.9%, delivering at 27.9% gross profit margin. We ended up with TRY 5.1 billion EBITDA, delivering 15.1% EBITDA margin.
We landed at TRY 1.6 billion net income, positive income delivering 4.7%. There is a decrease versus prior year, but we are very confident and happy that we delivered a very positive net income. Gross profit margin decline is partly a timing issue due to some cycles and other mixes and revenue related items. On EBITDA, the pressure reflects lower gross profit and operating leverage. In a softer demand environment, fixed costs are observed over a lower revenue and mix base. Net income also reflects below EBITDA items, including financial expenses effects, impacts and the impacts of a volatile macro environment.
What matters most is also what I believe, that the company is still delivering TRY 1.6 billion net income while maintaining a very disciplined financial position. In summary, Q1 shows a volume resilience. Margin remains under pressure from market weakness and cycles, but the quarter demonstrates earning protection and stabilization. Let me go to the next page. On this page, we wanted to show you a comparison where we ended up the year in 2025 and how we delivered in Q1 2026 . Q4 was a difficult quarter with EBITDA margin of 12.4% on the index basis shown here, as you can see. In Q1 2026, EBITDA margin improved to 15.1%.
Gross margin also improved from 24.9%, where we ended up the year, to 27.9% at Q1. EBITDA increased by 36.8%. Revenue increased by 12.2% with a volume increase of 2.2%. The market data still shows that the market contraction is still ongoing. As we have shared in Q4 2025, there is a very strong market contraction. You can see also on the page that the contraction still continues in key snacking categories. The improvement is important since it shows that Q4 was not the new operating baseline. Q4 was a combination of weaker than expected demand, a lower rate of high-margin chocolate sales, and the pressure in the Middle East.
In Q1, the business operated with better balance, volume improved, gross margin recovered from Q4, and EBITDA margin moved back above 15%. Core focus of the company remains again protecting the core, managing costs, using innovation and mix carefully and keep the balance sheet very, very, very resilient. On the breakdown, we want to show on this page the breakdown between domestic versus international. Q1 numbers, as you can see on the domestic side, revenue decreased by 5.8%, gross profit 21.2%. On the domestic gross profit margin landed at 25.9% and EBITDA margin at 15.3%. Driven by mainly weaknesses in the demand and high base impact of last year's innovations, mainly Dubai Chocolate, that impacted mainly the domestic numbers.
International operations had a slightly different profile versus domestic. Revenue increased by 1.5%, showing that the top line was more resilient. EBITDA margin moved from 21.5% to 14.6%. International growth is not that uniform, but some markets are growing with investment while others, particularly in Middle East after the late 2025 slowdown, are still working through consumer and channel pressure. On this slide, we are showing the breakdown by category. You can see that snacking sales volume increased by 0.3% year-on-year increase, supported by mainly international operations. Snacking sales value declined by 3.7%, reflecting the softer demand in Türkiye market and high base effects. From a category perspective, biscuits are the largest volume contributor, accounting for approximately 54% of snacking volume.
Chocolate accounts for around 37.5% of volume, cake around 8.6%. In revenue picture is different, slightly different. Chocolate contributes about 69% of the total sales value, biscuits around 34% and cake around 7%. Even a moderate decline in chocolate can have an impact and larger impact on revenue mix and gross margin. Chocolate category change impacted us in this quarter as well. On the balance sheet side, our balance sheet remains very well positioned and strong in this quarter as well. Permanent base net of EBITDA is 1.33 as of March 2026, which shows a very healthy balance sheet. All of our debt is on long-term side. As you know, we have closed our deals very, very successfully.
The nearest maturity is 2030, which is like four years, four and a half years from today. In terms of working capital cycles, comparing receivables and payables, there is not a significant issue. In terms of inventories, it's mainly the timing of cocoa procurement. We ended up 2025 with higher cocoa inventory which impacts this number. In fact, our Q1 shipments are lower than planned. The main driver is ending up the year with higher inventory. However, as you can imagine, this is a phasing impact. With our continuous production and sales it will normalize over the coming quarters. In terms of delivering our international accepted treasury policies, we continued using derivative instruments to hedge our open position, and we continued with that. We have hedged the open position has been hedged using derivative instruments amounting $310 million and EUR 115 million. Back to our CEO, Özgür .
Thank you, Fulya Banu Sürücü. Let's look at the outlook. I'm sure this is the critical slide you are expecting from us. Our 2026 guidance reflects a cautious outlook amidst market turbulence. We guide for flat net sales and an EBITDA margin of 13.5% ±1.5%. For the full year, we want to be prudent because of the geopolitical developments. There are still risks around demand, commodity timing and FX. There are still too many unknowns, uncertainty, ambiguity, volatility ongoing in our region. Our action plan is clear. On the top line, we will protect core brands, use Price Pack Architecture carefully, focus on affordability where needed, and continue to support innovation. On margins, we will manage mix, procurement, overheads, and operational efficiency.
On cash, we will work on optimizing working capital without compromising supply security. On risks, we will continue to use hedging, diversified procurement, multi-routing, and manufacturing footprints across Türkiye, Saudi Arabia, Egypt, and Kazakhstan. We are determined to deliver the guidance by using the full set of Ülker capabilities, brand strength, innovation, cost discipline, balanced flexibility, and geographic diversification to drive value in 2026. This is the end of our presentation. Thank you for joining us.
Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you are dialed in via the telephone, please press star two on your keypad. That's star two on your keypad. You may also ask a voice or a text question if you are dialed in via the web. We'll give a moment or so for any questions to come through. Thank you. Our first question is from [Isman Desi] from AK Investment. Please go ahead. Your line is open.
Hi. Thank you very much for the presentation. I just wanted to understand the reasons behind the behind your guidance because it implies like between 150 to 450 decline range in your EBITDA margin. I understand that you have a higher cost base now particularly on the cocoa side. Until what time should we see that pressure? Would it be possible to see margin compression in Q2 and the Q3 as well? Do you predict margin compression for the full year? When would you expect a turnaround starting in the snacking market to happen and affect your margins? Thank you very much.
Yes. Thank you. Thank you for the, for your question. Our guidance reflects a conservative view, flat revenue and 13.5% EBITDA margin, ±1.5 points. The main headwinds are softer demand in Türkiye, conflict-related pressure in MENA, and higher energy and logistic costs and inflation accounting effects from the higher priced 2025 inventory, which you also mentioned in your question. Any improvement in geopolitics, trade conditions or consumer sentiment will be, of course, supportive on this guidance to deliver more than the guidance. As a team, we are determined to deliver the best opportunity, the best of what can be done in the region.
For the Q1 as well, do you still see similar pressure as of April or the beginning of May?
Okay.
Can you hear me?
Sorry, yes, we just had a small connection issue. Sorry for that.
Okay.
Q2 outlook will be shaped by the developments in our region, which is, as I mentioned before, quite VUCA at the time being. It's very volatile and ambiguous, and uncertainty is high. Demand position in Turkey is soft. And depending on the demand movement in the Turkey part and depending on the regional conflict which is ongoing in our region, we will see how the Q2 will progress. But as I said, we will be doing our- we are determined to drive value towards our guidance. Hopefully, if the situation improves, deliver better than the guidance.
Thank you.
Okay. Thank you very much. Okay, just once again, star two for any questions. That's star two for questions. You may also ask a voice or a text question if you are dialed in via the web. Okay. It looks like the presentation was very comprehensive. I'll be passing the line back to the management and IR team for any concluding remarks.
Thank you, Michael. Özgür, for your final comments.
Thank you very much, Michael, and all who have joined us. As I said earlier, our purpose in Ülker is to create happiness, and our compass will continue to be our five A happiness growth model to drive a consistent, competitive, profitable, sustainable, and people-centric growth. Thank you very much.
Thank you very much.
Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.