Ladies and gentlemen, good morning and good afternoon, wherever you are, and welcome to Teknosa's First Half 2026 Earnings Call and Webcast. My name is Sibel Turhan, and I'm the Investor Relations Manager of Teknosa. Before we start, please take a moment to review our disclaimer notes. I would like to inform you that this presentation on 2026 first half financial results includes the company's financial information prepared in accordance with IAS 29 inflation accounting provisions, in line with the Capital Markets Board decision, dated 20th December 2023. Our presenter today is once again, Teknosa's CFO, Mr. Ümit Kocagil. Please note that all participants will be in listen-only mode during the presentation. Following the first part of this call, there will be a Q&A session, and you'll be able to submit your questions through the Q&A box or the chat box if you wish on your panel. If you have any questions, we kindly ask you to submit them just before the Q&A session begins, even during the session, just to allow us to review and address them efficiently. As a reminder, this conference call is being recorded and will be available on our investor relations website following today's webcast. I would like to hand the floor over to our CFO, Ümit [Non-English content]. Thank you, Sibel. Hello, everyone, and welcome to our webinar meeting on the first-half financial results for 2026. Before we begin, I'd like to take a moment to welcome our new CEO, Mr. Öget Kantarcı, who has joined us in the company as of 1st of August. Although he's unable to join us today's call, we are delighted to have him on board. We look forward to introducing him to you at a future opportunity. Today, I will begin with a brief overview of the first-half performance and highlight several KPIs. I will then walk you through the latest market developments, our financial performance, and the strategic initiatives, particularly aimed at improving networking capital, that we continue to implement to navigate the current macroeconomic environment while strengthening our long-term value creation. Since we have already published our financial results, I will be able to address your questions during the Q&A session. Let me start with the key highlights of the first half. The macroeconomic environment remained challenging throughout the first six months of the year. High interest rates continued to weigh on consumer demand, while financial costs remained elevated. At the same time, inflationary pressures and ongoing geopolitical developments continued to keep discretionary spending relatively cautious despite gradual signs of stabilization. Within this environment, the consumer electronic market remained resilient, supported primarily by continued demand in information technology and TV categories. Although the overall panel market declined slightly, the tech online market continued to outperform, with mid-single-digit growth reflecting the shift towards online shopping. Despite these headwinds, Teknosa outperformed both the panel and tech online markets in the first half by leveraging its omni-channel capabilities. Our strong marketplace execution, expansion into pure player platforms, and ongoing improvements in digital traffic, customer acquisition, and conversion rates enabled us to maintain our competitive position despite softer market demand. From a profitability perspective, operational performance continued to improve over the second quarter of the year. Our disciplined approach to cost management and ongoing efficiency initiatives supported EBITDA margin improvement compared to previous quarters. Intense competition continued to create pressure on gross margins throughout the first half of the year. Below EBITDA, financial expenses continued to weigh on profitability. 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 issuances at favorable borrowing costs. Our long-term transformation journey continues as planned. Our operational efficiency projects, digitalization initiatives, and profitability-focused actions remain on track. Our AI-supported demand planning, localized assortment management, dynamic pricing, and payment term optimization initiatives are mainly expected to be deployed in the third quarter of 2026 as scheduled, with a stronger financial impact expectation from fourth quarter onward. Before moving to the operational KPIs on the right-hand side of this slide, let me remind you that all figures presented today have been prepared in accordance with IAS 29's inflation accounting standards. Our prior period figures have been restated to reflect June 2026 purchasing power. Looking at our operational KPIs, our store network currently consists of 137 stores, compared to 153 stores a year ago, with average net sales area increasing to 684 square meters from 633 square meters per store. This reflects our strategy of operating larger, more experience-driven retail locations in line with our store network optimization strategy. Our marketplace channel continues to expand, reaching approximately 303,000 SKUs with 1,463 active merchants. E-commerce increased its contribution to our retail business, accounting for 11% of total revenues in the first half. Customer satisfaction also remains strong throughout the period, with NPS score of 70, Net Promoter Score, a key indicator of customer satisfaction, while our TeknoClub loyalty program continued its healthy expansion and reaching approximately 5.5 million members. These KPIs demonstrate that despite a challenging operating environment, we continue to strengthen the structural foundations of our business while executing our long-term strategic roadmap. 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 Turkey. The first one is the panel market, which represents the total sales of all consumer electronics in Turkey, while the second one is the tech online market, which constitute only the online sales within the panel market. During the first six months of 2026, the overall panel market declined slightly in real terms, mainly due to continued weak sales in white goods category. This decline was partially offset by continued strong performance in the information technology category, which remained the primary growth driver of the market. The remaining segments were relatively flat. The tech online market once again outperformed the overall market by delivering positive growth. Looking at the category basis, IT and consumer electronics, mainly TVs, remained by far the strongest performing category segment across both markets. Consumer electronics also delivered strong growth in online channels, while SDA and telecom remained relatively resilient despite weaker consumer sentiment. However, white goods continued to experience softer demand than the other categories. Overall, we continue to believe that the structural growth opportunity within 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 own omnichannel strategy. Moving to our financial performance, despite heavy competition and the optimization of our store network, Teknosa slightly outperformed the overall market during the first half. Our revenues remained broadly flat in real terms compared to the same period last year, contrary to decline in panel market. More importantly, our like-for-like sales increased by 6% year-over-year, clearly demonstrating the underlying strength of our store network. Strong growth in our online business remained one of the key drivers supporting overall performance throughout the period. At the same time, we continued increasing our focus on complementary products, higher-margin services, and improving marketplace profitability, all of which remain key pillars of our profitability strategy. Regarding gross margin, competitive intensity and promotional activities continued to pressure margins during the second quarter. Accordingly, gross margin declined to 11.7% in the first half versus last year, but on a quarter basis, it increased to 11.9%. Despite this market pressure, we remain focused on initiatives. These initiatives include disciplined pricing, expanding higher-margin product categories, improving category profitability, optimizing inventory management, and decreasing inventory turnover. Combined with our ongoing strategic projects, we believe these initiatives will continue supporting margin improvements over the medium term. Let me now briefly walk you through how we continue to view e-commerce as one of the key structural growth opportunities supporting our long-term top-line performance. Growing both our first-party and marketplace business remains as one of our highest strategic priorities. As consumer purchasing behavior continues to shift toward digital channels, we remain focused on strengthening our omnichannel capabilities and expanding our online channels. Our presence on leading pure-player marketplaces continued to participate throughout the first half and further strengthened our online presence. This strategy enables us to reach a broader customer base, improve accessibility, and accelerate sustainable online growth. As you can see on the right-hand side of the slide, our marketplace channels continue to expand. Today, our marketplace channels scale rapidly, expanding across multiple categories with a growing merchant base. At the same time, our product assortment has broadened significantly year -on -year, enabling us to offer customers a wider selection while enhancing customer experience and supporting marketplace profitability. Turning to the value and impact of our online business, our e-commerce GMV, Gross Merchandise Value, reached approximately TRY 8 billion during the first half. Today, e-commerce represents 17% of our retail GMV and 11% of our total revenues. These figures clearly demonstrate that e-commerce has become one of the key contributors to Teknosa's sustainable growth strategy and remains one of the most important key drivers of our long-term value creation. As we have discussed in previous quarters, we have been implementing efficiency initiatives across all areas of our operations. These initiatives continue to deliver visible benefits. Our operating expenses declined in nominal terms in the second quarter compared to both the previous quarter and the same period last year, reflecting the positive impact of our ongoing efficiency and strategic initiatives. As a result, our OPEX margin in the first half improved to 11.4%, representing an 80 basis point improvement year-over-year. These improvements reflect our continued focus on productivity, improving logistic efficiency, controlling personnel costs, and maintaining strict discipline across all operating expenses. Turning to EBITDA. Although gross margin remained under pressure throughout the period due to intense market competition, our disciplined cost management enabled us to improve EBITDA margin quarterly. On first half, EBITDA margin is 3.1%, but it increased from 2.9% in the first quarter to 3.4% in the second quarter. While EBITDA remains below last year's level due to gross margin pressure, the quarter-on-quarter improvement clearly demonstrates that the positive effect of our operational efficiency initiatives. As we move into the second half, we expect additional contribution from our cost optimization initiatives and projects. Below EBITDA, financial costs remain one of the most important challenges in Turkey for all industries and companies. Credit card commission expenses continue to be affected by the higher share of installment sales within the current high interest rate environment. Although the credit card cost-to-revenue ratio increased in the second quarter, it remained at 0.3% below the level recorded in the first half of last year. This reflects our continued efforts to diversify payment methods while reducing dependence on credit card collection. Our actions continue to focus on several key areas. First, we continue to optimize our collection mix while taking a disciplined approach to installment policies. Second, we continue renegotiating commission rates with banks. Third, we further expanded alternative payment solutions such as cash collection and consumer finance solutions with better terms and higher supplier participation. As a result of these initiatives, non-credit card collection share increased by approximately 6 percentage points year-on-year, which is decreasing the financial cost. While interest rates remain high, we believe these initiatives position us well for further improvement once macroeconomic conditions normalize. Let me now briefly discuss our net working capital position. As of the first half, seasonal purchasing activity and higher financial cost increased our borrowing needs, resulted in a positive net working capital position. In line with the seasonality effect, the deterioration in net working capital impacted by the higher purchases to support higher sales of the year in Q4 of last year, balanced by the all actions we implemented in Q2. Our net working capital improved, supported by increasing trade payables in line with higher inventory levels. Despite successfully issuing bonds at a favorable borrowing cost below prevailing market rates, higher funding requirements led to an increase in our net financial expenses to revenue ratio during the first half. Looking ahead, restoring a negative net working capital position remains one of our highest priorities. As shown on the slide, we are launching a number of strategic initiatives that are scheduled to be rolled out in order to enhance net working capital improvement. The first initiative focuses on AI-supported demand planning aimed at improving forecast accuracy, reducing excess and aged inventory, and ultimately speeding inventory turnover. The second one is localized assortment optimization, where we will leverage customer and location-specific insights together with AI to better align product assortment by store, optimize inventory allocation, improve sales, and reduce markdown risk. In parallel, we are implementing dynamic pricing capabilities, enabling us to adjust prices more effectively based on demand and inventory levels. This is expected to support margin level optimization, improve conversion, and accelerate inventory turnover. Finally, we are optimizing payment terms by extending trade payable days in line with inventory turnover, while further strengthening our working capital discipline. This initiative is designed to support our transition back to a negative net working capital position and reduce our net debt over time. Taken together, these initiatives are expected to deliver meaningful improvements in inventory efficiency, stock allocation, pricing effectiveness, and net debt improvement. More importantly, we expect major projects to be fully deployed during the third quarter, with the benefits beginning to become visible in our net working capital performance from the fourth quarter and onwards. Looking ahead, our objective remains unchanged: to build a structurally healthier working capital position, progressively reduce our funding requirements and net debt over the medium term, and improve revenue generation. Turning to our net income bridge for the first half. There is no major deviation in all our P&L items despite the high inflation environment except for financial costs, as I tried to explain previously. Higher net financial expenses driven by high interest rates and increased borrowing requirements continued to weigh significantly on the bottom line. Monetary gain offsets partly this impact on net income level. As a result, our first half net loss amounted to approximately TRY 1.5 billion. As I highlighted in our previous calls, the majority of these pressures originate from financial costs rather than operational performance. Our operational initiatives continue to deliver results, along with normalizing interest rates. We believe the combination of stronger operational profitability and lower financial cost will support recovery in net profitability going forward. Before concluding my presentation and opening the floor for your questions, let me briefly summarize our priorities for the second half of the year. Looking ahead, our priorities remain unchanged. Disciplined execution, operational efficiency, and sustainable value creation. We will continue to focus on driving profitable growth through our omnichannel strategy while maintaining a strong focus on cost and cash management. At the same time, we will further improve working capital, advance our AI-driven digital initiatives, and invest selectively in projects that strengthen our long-term competitiveness. We believe these priorities will position us well to deliver stronger operational performance as market conditions improve and the macroeconomic environments gradually normalize. This concludes my presentation. Thank you very much for your attention. Now, if it's okay for you, we may proceed with your questions. Before we begin taking your questions, I would like to kindly remind you that you can submit them through the Q&A box on your panels. When asking your question, please briefly introduce yourself before asking your question. Let me see. Our first question comes from Erkan [inaudible]. Equity turned negative this half. What specific operational or gross margin actions are underway to change this trend? What's your realistic timeline and threshold in cash flow or profitability terms for equity to turn positive again without a capital increase? Just a moment. [inaudible] Thank you, Erkan. I just tried to explain the operational measures that we have just taken. One of the main key objectives our company is to just increase our net working capital position and return to negative. Meanwhile, for the margin side, we are just making some changes. Inventory management is just becoming more and more important as the interest rates are continuing to be weighing on profitability lines. We are just going to work on this one. Second question, your realistic time and— Threshold. I think. Yes. You are just trying to ask, as our equity is in positive position, we are trying to ask the Article 376 of Turkish Commercial Code. Under the current legal framework, the company's equity remains sufficient under the temporary provisions of Article 376 of the Turkish Commercial Code, which are effective until 31st December 2026. As of today, no decision has been taken by the relevant corporate bodies regarding a capital increase for the year 2026. As Teknosa management, as I said, our focus remains on navigating the current market environment effectively, strengthening our financial performance, and continuing to create sustainable value for all stakeholders. There is a follow-up on the top. Let me read it first for our investors and analysts. In addition to my first question, given that the high interest rate environment is expected to persist at least through the remainder of the year, and inflation is likely to remain sticky with interest rate cuts into 2027 expected to be more gradual than previously anticipated, how much quarterly cash burn do you expect for Teknosa under these conditions? Additionally, at what point do you think the erosion in shareholders' equity is likely to stabilize? Your question just is asking for the expectation, but unfortunately, we haven't just shared any expectation for 2026. It's tough to just mention about this case, but as you know, with the seasonality effect in the first and second quarter, normally the net working capital is just in a positive position. Afterwards, with the increase in sales and the efficient inventory, and with the help of the initiatives that we are just implementing, we will be in a better position. I can just clearly say you how much quarterly cash burn we expect, but this might be just an answer for your question, I guess. In the chat box, Ümit [Non-English content], there is another question. Let me read it first. Who is first? Alper Özdemir. Hello, thank you for the presentation. Do you think the debt can be managed with the company's own resources? It seems that the company needs an imminent equity injection to repair the balance sheet. Do you expect net debt to decrease in nominal terms in the third quarter? Thank you. Similar to the first answer, actually. As I said, net working capital is just going to be positive in the first quarter with the seasonality effect. Going through the third and fourth quarters, net working capital should be just returning to a negative position. In this case, it's just going to create cash for us, which will decrease our net debt position. As of today, as I say, there is no decision that has been taken by the relevant corporate bodies regarding a capital increase, actually. With the company's resources, we are just going to manage it. Thank you, Alper [Non-English content] from Deniz Asset Management. From Erdem Yıldız, Marbaş Menkul. Thank you for the presentation. What macroeconomic conditions need to materialize for the company to move out of its loss position? What macro assumptions are we basing this on? The most important one is the interest rate, of course. As you know, in previous calls, maybe you will just remember, high interest expenses are, as I said, still one of the main challenges we are managing. As you know, credit card commission rates, which have a strong impact on our bottom line, haven't changed since the policy rate reached to 35% in late 2023. The central bank has seen further increases; the minimum wage has just been kept still. In this sense, whether the policy rate is 40%, 45%, the minimum commission rate hasn't just increased. In this sense, the threshold for us to just make a big change in the bank negotiations will be 35% of the policy rates. It doesn't necessarily mean that we are doing nothing yet. As I try to explain in our net debts page, we are just making lots of things just in order to decrease the level of credit card collection to minimize this cost or mitigate this cost, but the most important one is this one. Inflation, as you ask, is just affecting our operational cost. On the prices, it's not just creating a big burden. Almost all of the products that we are just selling are just important. In this sense, the FX is just more important for us than the inflation rate. Inflation, as I say, on the cost side. On the other hand, FX is just mainly on the revenue side; you can just think of it and also the cost of goods sold. Erkan [Non-English content] has another question on another topic, actually. As of October 2025, according to the news, Sabancı Holding mandated Pragma Investment Bank to find potential buyers. Is there any progress on this? In the last meeting, I also explained the same question, actually, Erkan [Non-English content]. There has been no new development on this matter since our last communication, and we haven't received any additional information from our main shareholder regarding a potential share sale or any prospective buyers. Should there be any such development, the necessary disclosures will be made to the public in line with the regulatory requirements. As Teknosa management, our focus remains on navigating the current market environment effectively, strengthening our financial performance, as I say. Are there any further questions? Ümit [Non-English content], let's wait a few moments to see whether additional questions. I'm also trying to see. Yeah. I couldn't just see the questions. If there are no other questions, let's thank you all very much for joining today's webcast, Ümit [Non-English content]. I would like to once again hand the floor back to you for your closing remarks. Thank you all very much for your 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. Bye-bye