Dear investors, welcome to our Third Quarter Results Conference Call. I'm Serkan Savaş, Reporting and Investor Relations Director. We hope you have all managed to download our recent presentation on our website, and, I now invite you to have a look at our third quarter results. The questions about the page, I will be taking your questions at the end of the call. We are raising your hands. First, we will look at the highlights for the third quarter. Top figures are for the third quarter 2023, are the net sales. Our quarterly net sales were TRY 74.4 billion, reflecting to 81% year-on-year growth. High inflation environments and improving traffic, traffic figures, and strong back-to-school season were the main drivers in third quarter and supported our top line growth. Supportive sales mix during the back-to-school season and price advantages coming from our advanced payments scheme temporarily increased our gross margin in this quarter. This quarter, the striking point is the gross margin improvement. The improvement in gross margin were then offset the pressures of minimum wage hike on OpEx. Thus, our EBITDA margin stood at 9% in third quarter, and EBITDA grew by 130% year-on-year. We'll be more elaborating the improvement in gross margin in the coming slides. Net income was TRY 3.8 billion, with corresponding 5.2% net income margin. In terms of stores, store expansion, in the third quarter, we have opened 228 new stores, and we had total around 12,000 stores, all consolidated basis. And capital expenditures stood at 3% of our revenues in the third quarter, which was slightly below our full year guidance. Cash generation also improved in the third quarter, along with the strong operating performance and lower CapEx, cash generation improved in the third quarter. And now, let's move on operational performance and with the like-for-like sales figures. Like-for-like sales in the... Now, we are at page six. Like-for-like sales increased by 66% in the third quarter. The basket, like-for-like baskets increased by 60%, which was slightly below our, below our quarterly average in term of internal inflation. Our internal inflation in this quarter was 63%, year-on-year. As mentioned before, we were expecting positive momentum in the traffic figures. We all disclosed in the previous quarters that we are improving this in positive trends, and it has been almost realized in line with our expectation. Like-for-like customer traffic increased by 2.1% in this quarter, and in year-to-date figures, it reached the break-even of zero. Post-Q3 in October, the positive momentum in traffic figures continued as well. On the stores site expansion, in the third quarter of this year, we have opened 206 new BIM stores and four FİLE stores in Turkey. We have opened nine stores in Morocco and nine new stores in Egypt. In total, we had 12,046 stores by the end of the third quarter, consolidated all across our operations. Store openings, for example, in the last twelve months period, we have opened 1,000 stores, consolidated basis, and closed down 225 stores due to earthquake. I think this trend would likely stay the same at the end of 2023. So at the end of the year, likely in the next conference call, we will have, again, 1,000 store openings for twelve months periods and maybe around 200 close downs. This is slightly below our expectations because we were targeting to compensate our store closures because of the earthquake, but it's taking a little bit time for that. So, but generally speaking, in Q3, we have opened 1,000 stores in 12-month period. This corresponds around 7% expansion rate. At number of mini stores, which have a 100-150 square meter selling space and lower SKU range, is approaching to 200 stores as of September. Mini stores are also doing well and helps us to penetrate to the city centers. And, capital expenditures, Q3, CapEx was TRY 2.2 billion in this quarter, corresponding to 3% of our net sales. There were three warehouses under construction, and one of them already opened, recently opened in Bursa, İnegöl, which is rented, and the others, Çanakkale and Tuzla constructions are also going on. Additionally, our Marrakech in Morocco, Marrakech warehouses is almost finalized. In two months period, we will open that. Our biscuit and chocolate factory construction also continues, but it is approaching to the end now, and we will open at the beginning of 2024. Due to lower than expected store openings, slightly lower than expected store openings in nine months periods, and delayed some land acquisitions and somewhat delayed in the solar panel investments, CapEx to sales is to 3%. Accordingly, we revise our full year guidance from 2.5% to 2-3.6% of revenues. Moving on to our financial performance. The sales, about the sales progression, page 10. Sales grew by 81% in the third quarter, reaching TRY 74.4 billion. As we mentioned before, there is an acceleration in sales in the third quarter, along with the back-to-school season and rising inflation. Coming closer to the end of the year, we revise, we also revise our sales growth guidance to around 80%, as our sales progression is heading to the higher end of our previous guidance. Post Q3 tradings, the sales also confirms our new guidance, which is 80%. This quarter's striking point is gross margin and gross margin progression, as you know. This quarter, our gross margin realized at 20.9%, which was higher than our general practice. This is the historic high, I can say that. Main reasons are some are temporary, for some main, main reasons are: first, the benefits of advanced payments to the suppliers increased our gross margin temporarily in Q3. As we have mentioned before, we have been paying in advance to suppliers to fix the price, to secure ourselves from rising inflation since the first quarter, so we somewhat benefited. But of course, this is temporary because today the advance payment is almost normalized. This is why we are saying that this is a temporary benefit. This is the first, advance payment to suppliers, is the first reason. The second is also supportive sales mix. The share of the basic products, which have naturally lower margins, a bit down compared to last year, because somewhat lower consumption and somewhat these basic products, inflation is much lower than the general inflation, headline inflation or other products inflation. So the share of... And also the strong base is the case. So the share of these basic products, which have lower margins, is down, so it's a little bit helped our gross margin to improve. This is the second one. The third one is also, we will be coming later. The FİLE contribution is getting higher. And as you know, the FİLE, the supermarket operation has higher gross margin progression. So it's also as the share of the FİLE increase, the gross margin, there's better gross margin contribution to consolidated basis. So, to sum up of gross margin, in this kind of environments, we sometimes experience temporary improvements in gross margin. You have already following BİM, for example, in the third quarter of 2018 or fourth quarter of 2021, we have faced the same progressions. Our gross margin, actually the post Q3, is back to our normal levels. As I said, some of are temporary, but we have also some structural improvements, but I can say that this big jump is generally temporary. Next is about the revenue breakdown in slide 11. We provide the breakdown of our revenues. BİM Turkey operation still has the majority share in total revenues, as you see. FİLE is also contributing much better compared to last year and reached to around 6% share in Q3, compared to 4% same period last year. So there is a significant increase or contribution from FİLE side. BİM Egypt and BİM Morocco contribution are nearly the same, somewhat dilution, but nearly we can say nearly the same as previous year. Sales progression of the product categories, private label share decreased to 61% from 63% when compared to last year's same periods. This change can be attributable to sales mix change, as the share of the basic food category, categories where the private label products are more dominant, was lower compared to last year. In addition, we have been sometimes adding new SKUs, as last actually, at the beginning of the year, we increased our SKUs from 850 to 900. And new SKUs added to portfolio were mostly branded and contributed to the share of the branded product share, share of the branded products. And lastly, increasing our spot offerings and spot products, you know, Friday offerings, and also in-and-outs, Tuesday offerings increased significantly. Those are also secure the Private Label share, because Tuesday and Friday offerings are mainly branded products, and the share is in. Actually, stock is around 8%. The also in and out is also more than 5-6%. So this also little squeezing Private Label share. But these products, Tuesday and Friday offerings, are, since they are mostly branded products, they are also somewhat contributing our gross margin as well. And OpEx management. This graph on page 12 shows the change in operating expenses as percentage of revenues by item. We see the impact of secondary minimum wage hike on margins. Personnel expense was the major contributor to the increase in OpEx item, but impact is realized less than our expectations due to better sales progression and operating leverage. In fourth quarter, operating leverage would likely work better since we don't expect any significant one-off cost pressures. Just electric tariffs increased by 20% as of 1 October, but this is likely normalization, we can say that, because in the last one and a half years' time, there hasn't been any increase in electric tariffs. Utility expense continue to contribute positively due to high base of next year, and likely to continue even though the 20% price hikes. If we ignore IFRS 16 accounting, the rent cost share in sales is still progressing stable at historic low levels. This is 1.4%. Now, let's look at quarterly EBITDA and EBIT at nine-month periods. In the third quarter, improvement in gross margin more than offset the negative impact of minimum wage hike. Accordingly, EBITDA realized at TRY 6.7 billion, and EBITDA margin was 9% in the third quarter. In nine-months period, EBITDA margin stood at 7.7%, which was above our guidance of 7%-7.5% for the full year. Accordingly, we revised our guidance to 7.5%-8%, following the better than expected results in nine-months period. As we discussed before, our gross margin got back to normal levels post Q3, with the help of the operating leverage, and employee expenses are also expected to normalize in Q4. Therefore, the midpoint of the new guidance is most likely at this point. As I mentioned before, we don't expect any major, cost pressure in the fourth quarter, so operating leverage would likely work better. And as mentioned in the previous post, work is behind after Q1, and profit margins has been improving after the first quarter. But keep in mind that this 9% EBITDA margin should not be taken as a new normal, since there are some temporary impacts in this quarter, as mentioned in the previous slides. But of course, there are some structural changes, structural improvements, as well, but this can be taken somewhat temporary. And moving on to net income slides, page 14. Our net income was TRY 3.8 billion, and net income margin was 5.2% in this quarter. There were no major one-off in the, in this quarter. There is only, we can maybe one-off, we can say that, negative impact from corporate tax rate increase in this quarter. In this quarter, effective tax rates increased to 27% because the first two quarters impacts of corporate tax rate increase are reflected to the third quarter. So, this effective tax rate is likely to come down in the coming quarters. And, on a positive side, financial income also supported to our net income owing to strong cash operating cash position. Now, we are also cash position slide on page 15. On this cash position slide, we want to show a more detailed picture of cash flow movements in Q3. As you know, short-term financial assets are not assumed as cash item per IFRS or TFRS rules. However, they are a cash-like assets in our case, because they are cash in banks. Short-term financial assets are liquid assets and include fixed income assets, such as Sukuks or lease certificates. So we prefer such investments for short-term financial return. So, including short-term financial assets and total assets, our cash position was TRY 6.5 billion at the beginning of the quarter, and now reached to 10.3 billion Turkish lira at the end of Q3. On top of the strong operational performance, decrease in CapEx to sales and rent expense to sales ratio also contributed to cash generation capability in third quarter. Advanced payments also normalized compared to previous quarters. So cash position is going well. There's a significant improvement in cash position on our side. As we said before, this is the somewhat positive impact on our net income. The next is about our FİLE and foreign operations. Now FİLE first. We opened four new FİLE stores in Q3, and number of FİLE stores reached 223 at the end of the third quarter. In nine months periods, we opened 21 FİLE stores. We opened 21 FİLE stores, but in October, we sped up the store expansion. So at the end of the year, likely to approach to around 35-40 stores at FİLE openings FİLE. FİLE online shopping platform, which was launched in May 2021, now available in the 26 cities in Turkey, and in a short period of time, online sales reached 5% of FİLE total sales. FİLE sharing total consolidated sales around 6% compared to 4% last year, thanks to its robust performance. If you look at foreign operations, we have opened nine new stores in the third quarter in Morocco, and our total number of stores reached 668 in this country. The fourth warehouse of BİM Morocco in Marrakech will be opened in January. We are also working on finding warehouse location for the fifth warehouse in the north of the country. So we are trying to enlarge our logistics infrastructure and then also speed up openings. In Egypt, we continue to open new stores. Nine stores we have opened in third quarter, and the number of stores reached to 338. The operational improvement continues in Egypt. We are operational continues in Egypt. The operation is not fully cash positive yet, but progression is good. So we will continue store openings in Egypt for the rest of the year and try to improve our operations there. And foreign operations contribution, page 18. The revenue contribution of foreign operations was TRY 9.6 billion, 5.3% of sales. While it was 6% last year, there is a bit dilution in revenue shares. This is mostly because of higher inflation in Turkey than in Morocco and Egypt. This is a bit dilution, but it's almost nearly the same. And EBITDA contribution was TRY 561 million in the nine months period, around 4% of total EBITDA. And about the guidance revision. We already mentioned revisions in our guidance in the previous pages. To sum up, we now expect our sales growth to reach our high end of previous guidance is 80%. On EBITDA margin, we revised our guidance to 7.5%-8% range, from 7%-7.5% previously. We started the year at very low base, and each quarter margin got better. And, as we highlighted before, we expect that EBITDA margin peaked at third quarter at normalization is likely in the fourth quarter. On CapEx side, we revise our CapEx to sales guidance from 3.5%-3.6% due to lower than initial planned store expansion and delayed land acquisition and somewhat delayed solar panel investment. There are some kind of delays to date, but there's no any actually cancellation because some approvals, maybe some negotiations would actually take much more time in this environment. So, we still frame our actually infrastructure of the warehouse openings, land acquisitions, and also, because due to our sustainability efforts, solar panel investments. And I would like to thank you for your attention today. Now I want to open the questions Q&A session. If you want to ask questions, actually, please raise your hands, and then I will open the floor to you. Ankit Suri, actually, please go ahead. The floor is yours. Hi. Thank you for your time, and congratulations on a great set of results and execution. I wanted to- Sorry, Ankit? Can you hear me? Hello? We are not able to test the moment, please. Ankit Suri, can you go ahead, please? Okay, I think, now, Serkan Bay, is the floor is yours. Please, go ahead. Thank you, Serkan Bey. Congratulations for good results. My question is again, about the trends, so far in October and maybe November. How do you see the traffic, trends, or do you see any sensitivity on the consumer side, you know, in terms of consumption patterns? That's my question. Thank you. Thank you, Serkan Bey. Actually, actually, in terms of traffic figures, as I said, the traffic growth is in positive moment, still the positive momentum in October, again, better than the third quarter, our traffic like for like figures. But generally speaking, the consumption is expected, is likely under pressure in the Q4 because of the minimum wage impact almost disappeared after the several high inflation months. So it's likely the consumption will be under pressure in Q4, but we are not facing any significant pressure. Our traffic growth is higher than the third quarter. And also stockpiling from the consumer side is not the case today because there's no rush to the product as last year. Last year there was a rush because of the Ukraine-Russia crisis and other rising inflation. Yes, today there are also inflation is rising, but there is more actually more trust to the actually at authorities and expectations. So consumption is likely to be under pressure. This I think we can little bit benefits in from this—from trading down going forward. We will see it, we will see it, but trade down will be actually we can face this. So but in sum up, our traffic is good, better than the third quarter. People's disposable income is coming down. The is the trading of the people. This is the general trend in October and November, and expected in December as well. Thank you. And Serkan, as a follow-up, what do you think about the inflation accounting to be applied next year? What should be the impact on BIM's figures? Thank you. Thank you, Serkan Bey. Actually, inflation accounting, actually, this is... First of all, this is applied for tax financials. It is tax financials and likely to be applied to IFRS financials, maybe in the first quarter or last quarter. It's not certain yet, but generally speaking, the retailers are more highly leveraged companies. Leveraged companies, the impacts to the retailers will be less. And also, actually, the inventory turnover days of the retailers are much lower than the others. Today, we have only one month inventory days, so it will just affect our mid gross margin, the one-month inflation. That's it. But we do not have any, actually very clear data at hand right now. We are still working on it, but we will be least affected one compared to others. The retailers will be least affected one compared to others. But in gross margin side, there are likely to be some dilution, maybe one month inflation dilution in gross margin sides. Thank you. You're welcome. Next question is Lütfü Hacıoğlu. Please go ahead. Thank you, Serkan Bey, and congratulations on the good results. Recent quarterly results were volatile in terms of year-on-year revenue growth and margins, and this quarter we see record high margins. I was gonna ask, is this gross margin sustainable in the coming quarters? What you already answered it. But my question is, should we expect this gross margin to hold around normal BIM margins at 18%? This is my first question. The second one, the most important, should we expect this volatility especially in revenue growth in the coming quarters? Because there were some lackluster growth, revenue growth in the recent quarters, maybe especially due to high base and maybe some other reasons. So, that there was some management change recently. So, is this gonna change this? Thank you very much. Thank you, Lütfü Bey. Actually, as gross margin, there is, I already actually mentioned its normalization in the fourth quarter, which is normal, is 18-18, 18.5% something levels. So there are some kind of temporary impacts in the third quarter, but it's gone in the fourth quarter. Some gone, some is still going on. So 18, 18, 18.5%, you can take as a reference for the time being, as a gross margin side being normal. You know that in the previous calls, if it is over 18%, we are okay, so we are happy with that. But of course, we are always trying to improve day by day. We are taking some actions, negotiating lot suppliers, advanced payments we are doing, but normal 18, 18.5%, you can take the gross margin. Revenue growth, actually, as we revise our top line to 80% and post Q3 also confirms this revenue guidance in October and also November. In the first week of November is almost in line with this guidance. Yes, you are right, there's high base in November and December, but today also right, there's rising inflation. Inflation is going up in basic, also in the food consumption. Food prices are going up. Yes, there is high base, but today's high inflation actually makes the high base disappear right now. So we expect around 80% levels going forward in the fourth quarter. There is no strategic change. Of course, we are always improving our procurements, negotiations with suppliers, improving our qualities, distinct new products. Management, yes, change, but actually it will take time to actually reflect to strategies. But today, BIM is going as as is. So, for fourth quarter, I can say that it's in line with our revised guidance. For the next year, actually, I cannot say anything right now because we haven't finalized our budget yet. So next year, actually, guidance will be actually discussed in the next call. I hope all clarified your questions. Thank you very much, but I meant that your revenue growth was below the inflation in the recent quarters. I intend to ask, are you gonna grow above inflation in the coming quarters? Actually, for example, in the third... Of course, generally speaking, we prefer to grow higher than inflation. For example, in this third quarter, our actually the basket, you have to take a reference, a basket growth. Our basket growth is 60%. Okay, in the third quarter, like-for-like basket growth is 60%, where our internal inflation is 63%. Very slightly below than our internal inflation. So going forward, of course, we prefer our baskets to grow actually in line in the internal inflation or better than inflation. But the good thing is that we are generating positive traffic. So in general sense, we generated 80%, 81% top line growth in the third quarter, where the internal inflation is 63%. So, we want to keep this gap going forward, if your question is that. Thank you very much. Thank you. Next question is from Hanzade Hanım, Hanzade Kılıçkıran. Floor is yours. Serkan Bey, thank you very much for the presentation. I have a follow-up question about the basket growth. Yes, it is below the inflation. And how do you explain this? Is this due to lower quantity in the basket or you have done some price investments? And, regarding this, how do you see the competition shaping in the fourth quarter? I mean, do you have a strategy to lead the market with price investments in the next few quarters? Because you have been losing some market share, and I just wonder if there is a strategy to gain the market share again in the fourth quarter and also next year. And finally, what is the pricing difference versus supermarket players on the branded category that you have been adding? Thank you. Thank you, Azadi Anum. First, the competition, of course, price investments. Yes, in October and November, we have been realized some price investments as all others, all retailers. And, you know that there are some kind of, actually, the initiations, price investments in all sectors, retailers and others, to help the disinflation process in Turkey. So we also contributed this by more promotions, more campaigns, and for more price investments. In the fourth quarter, yes, we have some kind of price investment. This, this is also a little bit, somewhat a reason of the normalization in the gross margin, because all the sectors are trying to contribute this, this inflation process of Turkey. We also joined this journey in this inflation process. So, but actually, the price in the third—your last question, price differences between the branded. You mean that branded, the price versus private label or, price difference between the other retailers? I think it is more or less same on the private label for every player now, but I wonder about the branded category that you have been adding. Actually, today in shelf price, shelf price difference is around 25%-40% in our case. Our private labels are around 25%-40% lower than the branded products. And you know, in our case, our private- I meant versus the competition. Competition? Yeah. Actually, you private label, BIM, and private label competition, right? Yeah, yeah, because I think in the market now, everyone offers more or less the similar prices for the same private- Mm. -label category. Yes. And we know that some supermarket players are quite aggressive, and they take down as well the branded category prices as well. Some anecdotal, I mean, experience suggests that they may be matching the prices with discounters as well on this category. But I try to understand if you are still at the lowest, I mean, if you can offer the branded category at the lowest price or not. Actually, in terms of private label, actually, almost all the retailers, discounters and supers in basic quantity, private labels, prices are all same right now. You are right, you are right. The supers are also, competing with the private label and prices. This environment actually, actually brings that, the price sensitivity. Unfortunately, price sensitivity. The price is come first right now. But whenever this inflation process starts, then the quality will come first in maybe next year, second half of next year. So then we will show our strong muscles there much more. But today, environment, you are right, private label, products, prices are all the same, among the retailers, but this is just a visible, visible gap. Actually, in terms of, I don't mean that quality-wise, quality-wise, gap. The quality-wise perception is much more different right now. But in terms of branded sites, branded sites, we are of course lower, when we lease a branded product, the shelf price is lower than the supers, I can say that. But in profitable site, they are all the same. And so- Yeah. In brand category, I mean, is it like 10% lower or much higher? I don't have any data at hand, but actually, let me clarify and inform you, my colleague or me inform you later on. Okay? All right. Thank you very much. Branded gap between, actually BİM and others. Basket growth is 60%, and internal inflation is 63%, so there's not any big gap right now. And we are also closing the gap with our traffic increase. As I said, our traffic is increasing by more in the fourth quarter, in October as well. So 63, 60% is almost the same, same, with the internal inflation is also. Actually, we are happy with that. But good thing is that we are improving our traffic growth day by day, month by month. So this lead our top line growth higher than our basket growth. So going forward, we want to, of course, list new products, taking some actions, somewhat, promotions, some campaigns, limited side, limited side, to improve our sales. And investing in lower prices, to improve our sales and so baskets. So going forward, likely, we will have basket growth, which is in line with our internal inflation. Okay. All right. Thank you very much, Serkan Bey. You're welcome. Thank you.