Hello, good morning. Welcome to our meeting regarding the result of Inter Cars Poland for the first quarter 2026. I would like to inform you that our meeting will be recorded. The first part of the meeting will be presentation of the result and market status by Krzysztof Soszyński, Vice President of Inter Cars Poland, and also Piotr Zamora, Member of the Board and the Finance Director. First part of the meeting will be the presentation, and the second part, you will have a possibility to ask the questions. Please, Krzysztof, the stage is yours.
Good afternoon. I would like to start a description of the situation in the independent aftermarket. Our conclusions from the benchmark against market peers are similar to those presented during our recent quarter, the fourth quarter 2025. Market consolidation will continue, and we believe that organic growth is proving more effective than merger and acquisitions. If we look on our results for the first quarter, our growth, 12% in EUR. This is something which is outstanding in comparison to the main European peers. As well visible is that player number one, LKQ Europe, because we try to only take this part which is comparable, reported decline.
The GPC is on, around, growth below 1%, MEKO 1.3%. Auto Partner who reached last year EUR 1 billion, and we add him to this comparison, as well as a listed player 7.5%. Average is 2.6%. We see that these results as well, including some seasonal products like tires and batteries in the case of the Inter Cars. We believe our presence on the 21 European markets giving us this good scope and as well the agile and as well the good response with the product portfolio to the need of the main customer, which for Inter Cars is independent workshop. There's a one-stop shop offer.
This is giving us exactly the right target for the future, which give us alignments in our LTI program, goals for the main managers in the group. We believe that we realize this, we could say program, and as well that we believe that similar growth, two-digit, we will continue in the next quarters 2026. We touched the last time on the summary 2025, the situation on the market. We see that the growth continue, the sales of the cars in EU, as well in our main domestic car market in Poland.
We see the growth on the EVs and as well the bigger growth on the hybrids, which we see is and still dominant supply of the car with the combustion engine with the mix with the battery and EV engine. We see more and more presence of the Chinese brands. Based on the global production, we could say picture is visible that they will fight for increasing their market share. We do not know how it will look like on a long run. Probably the We could say the market will change with the names and the brands. Some of them disappear.
Of course, on the end, everything which is changing, giving some new opportunities, some threats, but we focus on the opportunities that we can build on a long run, more stronger network, supplying our main customer. From the easy mechanical products, we will switch more and more company to the electric parts as well. All solutions which give the possibility to repair these cars with the remote diagnostic, with the all types of the tools and the trainings which giving us the possibility to supply this part of the markets. The market itself on whole Europe is not dynamic as it was after COVID by the post-pandemic reaction. We see that it's less than 1%-2%.
It's a kind big margin, we could say competition, and as well the It's too many suppliers and, this is giving high pressure on the margin. We can stabilize it based on the Central Eastern European countries growing faster, and as well that we realize this business model based on the one-stop shop that main customer is the garage, the point of fixing. This is giving us much predictable situation and as well the segments like a portfolio of the products which give us as well seasonality fit, and as well the possibility to balance between the channels and the types of the customers.
All other channels outside the independent workshops are connected with the building the network in the future and having the access to the customers which we do not yet have the access using our network of the branches. The details about the results, we'll explain on the next, we could say, assumption and indicators. Piotr Zamora, CFO.
Thank you very much, Krzysztof. Good afternoon. Here are a couple of comments or points that we would like to pay your attention to regarding our financial results. In Q1 2026, Inter Cars Group once again increased its market share and recorded sales of PLN 5.4 billion, which represents an increase of over 13.5% compared to Q1 2025. Maybe I would like to remind you that maybe I would like to refresh that the target for 2026 that we announced within our share option, share-based program is the sales increase of 10%. For the time being, we feel comfortable with this target.
Of course, we do not have, you know, crystal ball, and we cannot predict the future, but it seems that based on what happened in Q1 and also looking at the results of April and May 2026, it seems that in terms of sales and also EBITDA, we should be able to reach the targets based on today's knowledge, of course. In terms of sales dynamics measured in units that we always provide, in Q1 2026, Inter Cars achieved sales growth measured in units of + 0.6%. This means that the sales dynamics measured in value, in value terms is higher and indicates that there is a trend of margin growth during the quarter, which also seems to be an optimistic information.
However, as previously as we said, as we commented on it during the previous presentation commenting the results of Q4 2025, the situation on markets may vary, and the Polish market seems to be still the most competitive one, especially in terms of which translates into competition regarding the selling prices. The share of domestic sales continues to decline, however, and it is due to the higher growth of foreign distribution companies. Inter Cars' revenue from the domestic market, meaning Polish market, accounted for approximately 36.8% versus 39.5% Q1 2025. Simply that means that the foreign operations of Inter Cars are constantly growing and we expect them to grow further.
Over the past 12 months, we opened 24 new branches abroad, and we closed two new branches in Poland. We continued higher sales growth along with improved gross margins. Also we improved cost parameters as we indicated during the previous teleconference. We attribute this situation to the following factors. The first one we would say is the further development of competencies relating to continuous supply to customers through an extensive branch network, and enlarging product offering, which seems to be the most, the widest offering of products in our industry.
The second factor to which we would attribute this positive trends in terms of growth and gross margin is the development through segments and realization of segment strategies, thanks to which Inter Cars is able to effectively compete with smaller players, with the specialists in given segments. If we look at our gross margin, the gross margin increased from 29.4% last year to 29.6%, which is both effect of increase of the gross, overall gross margin, but also the impact of the positive exchange rate differences that we realized especially in March 2026. This gross margin increase that we attribute to positive Forex amounted to 0.2 percentage point.
Regarding the cost optimization, improved selling and general operating administrative expenses as a percentage of sales for the first three months 2026 amounted to 14.4%, which is down 0.2 percentage point compared to the same period last year. This is again what we already announced during the previous teleconference, that this is what we expect, which would come from savings in the logistics, which is mainly due to the robotization of the processes. We are now taking the benefits of robotization of phase I in Zakroczym, phase II, and also the new warehouse in Brasov, in Romania. Also, we did not incur any one-off costs in selling and general administrative expenses.
Of course, it is also due to the ongoing optimization of internal processes. The next point is the reduction of financial costs that we would like to pay your attention to. In quarter one 2026, the financial cost decreased down to PLN 47 million from PLN 55 million last year. This is mainly due to optimization of the working capital and decline of interest rates. What is interesting, and which will impact the financial cost in the following or subsequent quarters is the Net Debt to EBITDA after first quarter 2026 amounted to 1.74, which is down from 2.0, which will also impact the margin grid, which we have negotiated with the banks financing our operations, the consortium.
We estimate, we expect further decrease of the bank margins in the subsequent quarters. Profitability. The group achieved a net profit of PLN 211 million compared to PLN 157 million of net profit last year, representing a 34% increase. We think this is a very significant achievement in this competitive market conditions. As we discussed at the beginning of the presentation when Krzysztof presented the situation on the aftermarket, I said that we did not identify one-off events. This is true. Regarding other operation costs, we have one unusual transaction in Q1, which is related to the cancellation of one of the franchisee contracts with the group or with the franchisee partner which operated in Warsaw.
During quarter one 2026, we took over this franchisee group, and this group will be for sale to another franchisee partners in the future. For the time being, we are working on the optimization of internal processes. Once this is done, most likely we will recognize the proceeds from the sales, which we call the proceeds from the acquisition of the market, which are equal to the fee that we paid for the outgoing franchisee partner. Apart from this, we would like to pay your attention that in the recent days, we have signed the new consortium financing with eight banks.
In comparison to the previous syndicated loan, the syndicated loan is completely unsecured. Previously, the collateral was on the inventory. We extended the tenors from one year to three years, from three years to five years. At the same time, we've managed to negotiate the decrease of the bank margins by about 20% down. We also increased the amount of financing from PLN 3 billion to PLN 4 billion available for us. Technically, we can say that Inter Cars has from now on an investment-grade financing. From my side, this is all. I would give the voice back to Krzysztof. Thank you very much.
Yeah, I will try to summarize. We are the fastest growing distributor among the largest market players in Europe. Despite declining demand in selected European markets, we anticipate growth in 2026, thanks to a stable aftermarket and ongoing market consolidation, which rewards strong players like Inter Cars. We still see room for growth in subsequent quarters at the level of Q1 to double-digit, primarily through sales development within specific segments in each country. Growth based on segment strategies provides agility and flexibility in business management and increases the group's competitiveness, resulting in higher sales growth than local competitors in many countries.
In 2026, Inter Cars could become the leading player in Europe, given then the gap to the leader, which we measured last year, it was only 10% of the sales, and the first quarter showing that we are on a good path to reach this, and as well our long-term incentives for the key management members, giving us, well, alignment to reach these targets for the next quarters and year. Thank you very much. We will switch now to the answer your question.
Q&A.
Please, or share the questions on our meeting chat or, please, use the microphone to start the Q&A. Thank you very much.
If there are any questions, please ask.
I don't see any questions on the chat or from the audience. I would like to thank you very much with Piotr for all participants. If you will have additional questions, please contact us. Thank you to Magda for organizing this chat and our relationship with our investors. Thank you very much.
Thank you very much.
Thank you, Krzysztof. Thank you, Piotr. Thank you to all of you. The recording will be uploaded to our relations site, so you can share it. Thank you very much again. See you next time.