Dear Analysts and Investors, welcome to BIM Birleşik Mağazalar. Fourth quarter 2024 financial Dear Analysts and Investors, welcome to BIM Birleşik Mağazalar. Fourth quarter 2024 financial result webcast. I am Akif Daşıran, Head of Investor Relations and Sustainability, and I am pleased to be joined today by our CFO, Fatih Meriç. We hope you have had a chance to download our investor presentation from our website. Please note that this presentation includes both inflation-adjusted and unadjusted figures to facilitate a clear quarterly comparison for our investors. Now, I would like to hand it over to Mr. Meriç, who will provide an introduction and key highlights of the quarter. Thank you, Akif. Hello everyone. Let's begin with the key highlights of the year. Before diving into the details, please note that all the figures on this slide are inflation-adjusted. For 2024, our annual net sales reached TRY 520 billion, reflecting 10% year-over-year real growth. Our ongoing store expansion program continued to support this strong sales performance. Our EBITDA margin stood at 4.3% in 2024. Without inflation accounting, the margin was 7.5%, in line with our guidance. Despite the challenges, which elevated operating expenses throughout the year, we successfully reached our guidance. Our net income for the year was TRY 18.9 billion, with a 3.6% net income margin. In the fourth quarter, we opened 206 new stores, bringing our annual net expansion to 1,101 stores. As a last point, capital expenditures accounted for 3.5% of our revenues in 2024. We will provide further details in the upcoming slides. Now, let's review our 2024 guidance versus actual results. Please note that these figures exclude the impact of inflation accounted. We had anticipated 75% sales growth for 2024, with a 5% deviation buffer. The year-end result came in close to our expectation at 72%. Our EBITDA margin guidance was from 7.5%-8%, and it materialized as expected at 7.5%, despite the challenges faced throughout the year. Lastly, our annual CapEx guidance was 3%-3.5% of sales, while actual execution stood at 3.7% of sales. This higher CapEx figure was primarily driven by strong store openings, capacity investments in our biscuit and chocolate factory, and solar energy projects. Moving on to our operational performance, let's take a closer look at the key metrics driving our business. Starting with the like-for-like sales slides, please note that all figures presented here exclude inflation adjustments. Like-for-like sales grew by 40% in the fourth quarter. Like-for-like basket size increased by 47%, while our internal inflation averaged 45% for the quarter. Similar to the third quarter, our traffic numbers remained negative in the fourth quarter. With no secondary minimum wage hike mid-year, consumer spending continued to decline. Unlike our competitors, we did not benefit from the shift toward modern retailers in the tobacco and alcoholic beverage categories, as we do not sell these products. This shift was largely driven by traditional retailers increasing credit card commissions to offset low profitability in these categories. Additionally, the high base from the same quarter last year also contributed to the decline in traffic. Meanwhile, for the full year 2024, like-for-like traffic growth was slightly positive. Looking ahead in the first two months of 2025, the impact of the high base on traffic figures continues. Let me continue with revenue breakdown by format and geography. BIM Türkiye accounted for 87% of total sales, while FİLE share in consolidated revenues increased to 8%. The remaining 5% came from our foreign operations. In Türkiye, our private label share declined to 59%, primarily due to an increase in in-and-out category offerings and a shift in sales mix. However, I want to emphasize that our PL strategy remains unchanged, and we continue to focus on enhancing our PL offerings in our stores. Additionally, inflation in basic categories was relatively lower compared to headline inflation. Since our PL share is significantly higher in basic categories, this sales mix effect also contributed to the dilution of our PL share. When we come to store openings in Q4, in the fourth quarter of 2024, we opened 137 new BIM stores, 15 new FİLE stores in Türkiye, 30 new stores in Morocco, and finally 24 new stores in Egypt. By the end of Q4, our total consolidated store count reached 13,583. When we come to the CapEx slides, in the fourth quarter, our CapEx with inflation accounting amounted to TRY 3.6 billion, representing 2.8% of net sales. Excluding inflation accounting, quarterly CapEx was TRY 4.5 billion, corresponding to 3.5% of net sales. After two consecutive quarters of high capital expenditures, our capital expenditures normalized in the last quarter. This concludes my section of the presentation. Now, I'll hand it over to Akif for the financial performance. Thank you, Fatih Bey. Let's begin with the sales progression on page 12. In the fourth quarter, our revenues increased by 5% year-over-year in real terms and 10% for the full year. Excluding inflation accounting, sales grew by 54% year-on-year in the fourth quarter, reaching TRY 128 billion. We had anticipated 75% sales growth for 2024, and the year-end result came in close to our expectation at 72%, totaling TRY 460 billion for the year, excluding inflation accounting. On the next slide, gross profit and gross margin progression. Including inflation accounting, our gross margin for the fourth quarter was 18.2%, representing a 500 basis point improvement compared to the same quarter last year. Excluding the impact of inflation accounting, our gross margin stood at 21.1%, reflecting a 156 basis point increase from the same quarter last year. The benefits from advance and early payments supported our gross margin in the fourth quarter, although this came at the expense of a temporary deterioration in working capital. On the next slide, OpEx trend overview. The OpEx to sales ratio increased to 16.3% in the fourth quarter. Excluding inflation accounting, the ratio was 14.8%. We will delve into the details in the next slide. The graph here illustrates the change in operating expenses as a percentage of revenue by item. As shown in the graph, personnel expenses remained the main driver of the increase in OpEx items. Personnel expense to sales rose to 184 basis points year-on-year in this quarter. On the positive side, utility expenses continued to contribute favorably, with ongoing energy efficiency projects helping to keep utility costs under control. Finally, excluding the impact of IFRS 16 accounting, rent costs as a percentage of sales stood at around 1.7% in the fourth quarter. On the next slide, annual and quarterly EBITDA. Including inflation accounting, EBITDA for the fourth quarter was TRY 7 billion, with an EBITDA margin of 5.4%. Excluding inflation accounting, EBITDA margin was 8.3% in the fourth quarter. As mentioned earlier, our EBITDA margin guidance for 2024 was 7.7-7.5%, and the result came in line with expectations at 7.5%. After experiencing temporary pressures from higher operating expenses earlier in the year, primarily driven by employee-related costs, our EBITDA margin has continued to normalize this quarter, reflecting our strong commitment to efficient cost management. Including inflation accounting, our quarterly net income was TRY 3.9 billion, with a corresponding net margin of 3%. The effective tax rate increased in the fourth quarter, which had a negative impact on net income. This was primarily due to the different accounting standards between tax purpose financials and IFRS, leading to an increase in deferred tax expenses, which elevated the effective tax rate for the quarter. Excluding inflation accounting, net income increased by 34% year-on-year, reaching TRY 5.7 billion in the fourth quarter. Moving on to quarterly free cash flow. This slide provides a more detailed view of cash flow movements in the fourth quarter, excluding inflation accounting. As you know, short-term financial assets are not considered cash items under IFRS rules. However, they are cash-like assets in our case. STFA includes liquid assets such as sukuks and lease certificates, which we prefer for short-term financial returns. Including STFA, our cash position stood at TRY 8.2 billion at the end of the quarter, lower than the previous quarter. Working capital temporarily deteriorated in the fourth quarter due to early payments to suppliers, which reduced trade payable days but positively impacted gross margin. This was a temporary change, and you can expect trade payable days to normalize in the upcoming quarters. Last two installments of our dividend distribution were in the fourth quarter, and these have an impact on our cash flow. On an annual basis, however, our net cash position increased to TRY 8.2 billion, up from TRY 7 billion last year, as shown in the following slide. On the FİLE side, we opened 15 new FİLE stores in the fourth quarter, bringing the total number of FİLE stores to 287. Over the past 12 months, we have opened 51 FİLE stores. FİLE's share of total consolidated sales exceeded 8% in 2024, up from 6% the previous year, reflecting its strong performance. As we announced on the Public Disclosure Platform yesterday, we have initiated the process of establishing a separate company for our FİLE operations. FİLE has already been operated under a separate organizational structure, and it will continue to do so as a separate company. The spin-off process is expected to be completed in 2025. Meanwhile, BIM will hold 100% of the new company and will continue to fully consolidate FİLE operations as it is. If you look at foreign operations, in Morocco, we opened 30 new stores in the last quarter, bringing the total number of stores to 789 in the country. Our original plan for 2024 was to open 100 stores, and we successfully exceeded this goal by opening a total of 102 stores. In Egypt, we opened 24 new stores in the fourth quarter, increasing the total number of stores to 418. While our plan for 2024 was to open 70 stores, we opened 62 stores. This concludes my section of the presentation. Now, I will hand it over to Fatih Bey for the guidance. Thank you, Akif. For 2025 guidances. We are providing our 2025 guidances both with and without the impact of inflation accounting. We estimate 45% top-line growth, excluding inflation accounting, and 8% top-line growth with inflation accounting in 2025, assuming we maintain our current store opening trends. We expect a flat EBITDA margin trend in 2025 in non-inflation adjusted figures. However, with lower inflation, we anticipate a reduced negative impact on gross margin, and our guidance reflects a 7 basis point improvement in EBITDA margin with inflation-adjusted figures. We will maintain our high investment appetite in 2025. Our CapEx to sales ratio is expected to be between 2.5% and 4%, both with and without inflation accounting. We will continue investing in store expansion, new warehouses, and sustainability projects. As a part of our CapEx plan, we plan to allocate TRY 4 billion to sustainability-related projects in 2025. Akif, would you like to elaborate more on sustainability approaches? Sure. Thank you, Fatih Bey. As you already know, we have set a target to reduce our greenhouse gas intensity by 20% by 2026, and we are steadily moving closer to this goal. We have been investing in our own solar energy, and our currently installed capacity has reached 63 megawatts. By 2025, our plan is to produce at least 25% of our electricity needs for our Turkey operations through our own energy facilities. We are also continuously working to improve packaging efficiency. As a result of our efforts in 2024, we successfully prevented 491 tons of plastics and 800 tons of paper from being used. Customer satisfaction remains a key metric for sustainable growth. We have successfully improved our NPS to 52 in 2024. In 2024, we made more than 7,000 net recruitments in our Turkey operations, with 56% of new employees being women. Regarding the gender pay gap, we measured it at 4% in 2024, primarily due to performance bonuses. BIM also continued to invest in sustainable product categories in 2024. As a result, the turnover from sustainable products reached almost 15% of total turnover. As a result of our ongoing sustainability efforts, we have maintained our position in several local and international sustainability indexes, including FTSE4Good Emerging and FTSE Emerging ESG Index. This is the end of our presentation. Now, we may take your questions, if any. Please note that if you want to ask a question, you can raise the hand, and we will open the floor to you. Alternatively, you can write down your questions via Zoom. We will read and answer them accordingly. The first question is coming from Hanzade Hanım. Hanzade Hanım, the floor is yours. Thank you very much for the presentation, Fatih Bey and Akif Bey. The first question is on FİLE operations. What is the main reason for spinning off these operations? Are you preparing this company for an IPO, or is it an acquisition target? I am trying to understand the motivation here. Second, do you continue on advance payments in the first quarter and therefore be able to keep your gross margin over 20% levels? Have you started to observe some normalization in core goods inflation in your basket, which may help you w hich may help you to track the CPI on like-for-like revenues and improve EBITDA shortly. I am trying to understand the dynamics here. Thank you. Thank you, Hanzade Hanım. For the questions on FİLE, actually, this is just an operational issue. There is nothing changed in the strategy because it has already operated under a different operational structure. Therefore, the current structure will continue, but just under a separate company. There is nothing changed on the strategy on FİLE operations. Regarding the working capital and advance payments issue, yes, in the fourth quarter, there was a temporary increase in the early payments and advance payments, but you can expect a normalization in the first quarter, as that was just a temporary increase for the fourth quarter. We will see a gross margin normalizing below 20% levels in the first quarter? It is too early to give a specific number, but for 2025, our general understanding or general expectation is some normalization in gross margin, but it will be offset by some efficiency improvement in the OpEx to sales ratio. Therefore, they will compensate each other. Okay, thank you. About this core goods inflation, because you have been highlighting for a few quarters that the basic goods inflation is quite low currently at around 20%-25%, and that was also one reason of the slower growth because you have a higher share in the core goods. Have you started to observe some sort of normalization in the inflation of these core goods inflation, which may help your revenue performance and maybe EBITDA going forward? Not yet, because these core commodity types, especially for commodity-type core products, are more sensitive to the FX movements. As you know, the currency is very stable for a while. Therefore, the price increases in those categories are relatively lower than the headline inflation. Currently, there is no major change in this trend. However, with the decline in inflation, of course, this cannot continue forever, especially in the second half of this year. Most probably, we will see some normalization in this situation. All right. Thank you very much, Akif. Thank you, Hanzade Hanım. The second question is coming from Cemal Bey. Cemal Bey, the floor is yours. Thank you for the presentation. My question is related to the traffic. We see a decline in traffic in the last two quarters. Could you further elaborate the possible reasons behind that traffic decline? Do we see changes in consumer trends, or do you have actions to increase the traffic again, or is it just a base effect? Thank you. Thank you, Cemal Bey. Actually, this is a combination of several reasons, as we tried to mention in the presentation, but there are some several reasons behind that. First of all, yes, as you mentioned, there is a base effect issue because our numbers were strong in the same quarter last year, especially in the second half of the previous year. This is not the whole story, of course. There is a weakness in the traffic figures, we should admit. The reason for that is, as you know, last year, there was no secondary minimum wage hike. Therefore, the consumer spendings, we observed the impact on consumer spendings, especially in the second half of last year. That was the main reason. If you are asking why this is more severe in BIM, not on the competitors, we are the only one that's not selling tobacco and alcoholic beverages within the modern retailers. In 2024, especially in the second half, there is a very major shift from traditional channel to modern retailers, especially in these categories, tobacco and alcoholic beverage categories, as we mentioned in the previous webcast. We did not benefit from this shift in the second half of last year. That was the main reason for our differentiation versus the competition. However, we are not worried about it. This is a low-quality traffic, actually. This tobacco and alcoholic beverage traffic is very low-quality, low-margin business. Therefore, this is also one of the reasons why our profitability performance is also outstanding. Thank you. You're welcome. There is a written question coming from Görkem Bey. He asked, "Could you please comment on Competition Authority's latest investigation for food retailers? What is it about? And could you please confirm whether there is a single investigation towards BIM or more?" Thank you, Görkem Bey. Actually, there are two separate investigations that have been communicated to us. However, at this stage, no definitive violation has been identified. Therefore, we don't know the details of these investigations. Just we know that these investigations primarily focus on potential violations under Article 4 of law. Therefore, there are potential titles in this Article 4, namely agreements between competitors, exchange of information between competitors, or suspicion of cartels. There is no specific or definitive information at this stage. There are, yes, two investigations, but none of them are as a single investigation towards BIM. Both of them are either related with the sector overall or the sector plus the suppliers. I hope it helps your question. Another follow-up question from Hanzade Hanım. How much space expansion do you target for international operations in 2025? Actually, for all of the operations, you can take last year's trends for 2025. We do not expect a major change in our expansion plans for 2025. You can take the similar pace for all operations. Another written question from Mikael. "Hello, I was wondering how long do you expect the traffic weakness to sustain, and what measures are you taking to reverse this negative trend?" Thank you. Actually, as we mentioned, there are several reasons behind that. One of the reasons is the base effect. The base effect will soften starting by the second quarter, and especially it will be not the case in the second half of the year. Therefore, from the base effect issue, we may see start to improve, gradually improve starting from the second quarter. Of course, we are taking actions. We are Türkiye's largest retailer, food retailer, and we are the hard discounter. Of course, our strategy is always to be defensive, especially for the tough macro and economic conditions. Even in 2024, despite the lower traffic figures, we managed to increase our sales by double digits in real terms. Therefore, we plan to continue our growth pace in the following periods as well. There is a follow-up question from Cemal Bey. Cemal Bey, the floor is yours. You're on mute, Cemal Bey. Sorry if I missed it, but I would like to ask the reasoning behind setting the FİLE as a new company. Sorry if I missed if you give the answer. That's my question. Thank you. Yes, Hanzade Hanım also asked this question, as I remember. There is no specific change in the strategy. FİLE was already operated under a different operational structure, and from now, it will continue with a separate company. There is no change in the strategy. One last question about the consumer sentiment so far in Ramadan period. Do you see any changes in consumer behavior in terms of purchasing or other terms? Thank you. Thank you, Cemal Bey. Actually, yes, the Ramadan period has always been the strongest month for our operations, and it is still the case. We observe stronger sales and demand in the Ramadan period, but this is, as usual, it's always the strongest month for our operations, and it is also the case for this year as well. Currently, we are happy with the performance in the Ramadan period. Thank you, Akif. You're welcome. There is an anonymous written question. What could be the upside or downside risk to margin guidance? Of course, there are always upside and downside risks to all guidances. If you are asking for the inflation, you can see that there is a difference between our guidances with inflation and without inflation. For the inflation-adjusted figures, lower or higher inflation may also affect our EBITDA margin as well, not only for the nominal growth, for the nominal revenue growth, but also it is also affecting the profitability as well for the inflation-adjusted figures. If you are asking non-inflation-adjusted figures, actually, our operations have been always stable. BIM's major asset is the visibility and transparency. We expect a similar pace in the growth for the store openings and for the profitability. We plan to keep up these profitability levels. Therefore, since we already observed that the government is back on the one single minimum wage hikes annually, the risks are limited, but of course, all guidances, all expectations are open to the upside or downside risk. Another written question from Victor I. Can you elaborate on your thinking with regards to shareholder remuneration? Do you plan to apply to AGM for a buyback authorization, given the distortion to your share price following the news of investigations? This is a decision to be taken in the AGM. Currently, our strategy for the capital allocation, as we communicated earlier, we always prefer cash dividend payments. Therefore, our initial preference is always dividend payments for the shareholder remuneration. However, if there is a need in the market for the buyback for any reason, such as very sharp fluctuations in the share price, then we intervene in the market with buyback programs. Generally speaking, as a strategy, always our initial preference is cash dividend distribution. Another written question from anonymous participants. Could you give some color for the first quarter? Is it in line with your guidance from traffic growth and margin perspective? We tried to give a color during the presentation. Of course, we gave our guidance today, and of course, it is in line with our guidance. In our expectations, we are aware that, especially for the traffic figures, the base effect will be valid in the first half, but it will be the reversal in the second half. Therefore, currently, yes, it is in line with our guidance. I think this is the end of the questions. Thank you very much for your contribution and participation and joining us today. We hope to see you in the next webcast. Thank you very much.