Good afternoon, ladies and gentlemen, and welcome to the Ülker Bisküvi Q3 2023 financial results conference call and webcast. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press the star zero for the operator. This call is being recorded. I would now like to turn the conference over to Beste Taşar, Investor Relations Director. Madame, please go ahead. Thank you. Hello, everybody. This is Beste. Welcome to our third quarter financial and operational results webcast. Today here with me in the room are CEO Mete Buyurgan and our CFO Fulya Banu Sürücü is with me. I hand over Mete Bey for the opening remarks and to start. Mete Bey. Thank you, Beste. Good afternoon. Welcome to our Q3 investors meeting. Today I am very glad to announce terrific results not only for this quarter but also for the entire quarter, despite the life's challenge. As you may remember, we had started to the year with a devastating earthquake disaster, unfortunately, which impacted our business, of course, psychologically and financially. But we achieved to recover all the losses, at least the financial losses, and the slow start for the year. We are having better results in almost in every quarter. As you know, we have very sustainable and profitable growth, especially for the last five years, and we accelerated our growth, accelerated our efforts in terms of corporate governance and our sustainability efforts in the recent years. We have invested for operational excellence and digitalization for a long time, and now I must say that we are enjoying the results of those investments and efforts in a great way. This is a long-term journey, and we are happy about our progress in our business, in such a difficult environment. In terms of if I highlight the performance of Q3, the highlights are the most important one was strong top-line growth. This is one of our biggest important drivers for our business, especially driven by strong back-to-school campaigns, new launches, and timely pricing. Outperforming robust momentum in gross profit margin, which is 610 basis points, above prior years, showing very successful implementation of our strategies and tactics. Almost 6% gross margin improvement is quite important. There are some impacts of sales mix, portfolio mix within this result. At the end of the day, it's a huge increase and very healthy growth in terms of our profitability. In terms of EBITDA level, the bottom line grew significantly again, almost 112%-113% outpacing revenue growth thanks to our low-cost operating model, which gives us exponential growth in the EBITDA level while we keep growing at the top line. Net Debt to EBITDA is another important ratio for us, which we are very careful on that. Now it has been decreased to 1.9x multiple as of September 2023, which is another very healthy sign of our business impact. Lastly, based on those, in light with those achievements results, we are going to revise up our full year revenue growth outlook to TRY 42.5 billion. We are going to revise our EBITDA outlook into 19.75%. In terms of numbers, shortly, I can say that we have reached TRY 32 million, which is quite sizable business. Our gross profit has been increased 91.4%, and EBITDA increase is 91%, which we are reaching TRY 6.9 billion at the end of third quarter. Those numbers are showing the strength of our business. As I mentioned, our Net Debt to EBITDA ratio declined from 2.2-1.9, which as I mentioned, we are very careful on that actually. If you look at Q3 results, I must say that this is the most strongest quarter for us in terms of top-line growth, bottom-line growth, volume growth as well. Also in terms of market share, we keep increasing our market shares in the last two months, three months, especially. We keep performing in a great way. In terms of consolidated operational financial performance, one of the most important thing for us was the volume growth in such a difficult year actually, with various challenge. As you may see that as of quarter thirds cumulative numbers, we outpaced the last volume about 2,000 tons, and we keep the pace of growth actually in October as well. We keep growing very fast. I am confident that we are going to have a higher volume than last year, which is again, as I mentioned several times, showing the strength of our business. On the other hand, it's the more than 650,000 tons of volume business as a whole year, which means that there's a very complex and a very strong operation, which we are managing actually. Total revenue is TRY 32 billion, as we discussed, we've mentioned. Gross profit rates are quite healthy and very high. EBITDA margin keep increasing. Net income level as of cumulative level, due to the very strong result in Q3, we reached a positive net profit levels as well. Of course, we have some open position in total expected exposure, but as we are always presenting you, we have a consistent hedging policy, and we can see that our consistent hedging policy is working properly, which will protect us against the further fluctuations. Thank you for listening. As I mentioned, I am confident for Q4 as well. We are going to end up the year in a great way with great numbers. Right now we started to plan our next year's AOP and our strategies, how we are going to fulfill. We are discussing our investment plans. Right now, Fulya Bahadir, our CFO, continue to present further details. Thank you, Mete. Good morning and good afternoon, everyone. Thank you for joining our call today. As our CEO, Mete, shared outstanding results in all KPIs, strong operational performance growth combined with very strong financial performance, drives this outstanding Q3 results. I think our clear strategies are proven resilient to severe conditions. Makro's timely actions, high discipline on management, and execution continues to pay off. Let me take you through the results of performance by each category for Q3. 7.9% volume growth in total in all categories, and in biscuits by 6.5%, chocolate by 8.9%, cake by 12.8% volume growth versus prior year, which is a very important KPI that we have managed to deliver in Q3. What are the drivers of this increase? High base impact, strong consumer demand backed with back-to-school campaigns, activities, successfully implemented trade spending activities, and new launches drive this high volume growth versus prior year. This volume increase translates to 6%-8% increase in revenue growth. Above 55% growth in each category. Biscuits 58%, chocolate 76.5%, cake 78% approximately up versus prior year. We have a very dynamic pricing model with effective mix management, proactive initiatives to mitigate risks drive this robust revenue growth versus prior year. When we take a look at domestic operations, which is also a very strong result and performance in Q3. We hold a very strong market leader position in Turkey, our base market. Biscuits, 39% market share, chocolate 39% market share, and cake 21% market share. You can see the improvement in market share numbers versus prior quarters as well. In biscuits, 1% increase in market share reaching to 39%. Chocolate, we kept our strong market leader position in chocolate, and cake increased by 1% market share versus prior quarter. On the next page, you see the NPD sales contribution of 12% for Q3 2023. Innovation focus continues. Some of the pictures of our new products are shown on the back on page 11. Next page, please. I want to take you through the results in Turkey, which is our core market. Despite many challenges, volatilities, and macroeconomic conditions and environment in Turkey, and uncertainties, high inflationary environment. We managed to navigate all these challenges with extraordinary headwinds, and we were able to deliver excellent results in Turkey. In our core markets, you see the volume increase of 8.5%, which are mainly driven by back-to-school campaigns, effective marketing, new product launches with optimized trade spending activities, which also drove 68%, almost 70% revenue growth in snacking sales. Gross profit margin. We have been delivering gross profit margin increase on a steady basis each quarter this year, and it was also the same last year as well. This quarter is also no exception. We were able to reach to 12.8% gross profit margin in Q3 and EBITDA margin reaching to 20.7%. These results are all driven by strong execution on pricing, mix management, cost management, supply chain procurement, and our passion on innovation drive these excellent results in Turkey. On a year-to-date basis, the picture does not change. Volume growth of 2.5%. On a year-to-date basis, our volume grew by 2.5% versus prior year, 76% revenue growth, and on a gross profit basis, we reached to 30.7%. EBITDA margin, which is a record EBITDA margin we have reached so far, which is 21.1%. Thanks to our agile decision-making models that transformed all these challenges into opportunities for us. When we take a look at our export and international businesses, we sustained our solid, very strong business presence in our international markets we operate in as well. Almost 24% market share in Saudi Arabia is kept, and almost 19% market share in Egypt, and 17% market share in Kazakhstan are kept. Again, very strong presence in international markets. New innovation and new products are also very important for our international business. For Q3, they drove almost 5% of our sales in Q3. On a year-to-date basis, our international businesses, slight decrease on volume, but we were able to increase our revenue by 53% and gross profit margin reached to 38.1% and EBITDA margin reaching to 22.7%, which are very strong and healthy international business pictures as well. I also like to take you through our international operations, our M&As that we have gone through over the years. International operations are M&A in international markets drive 36% of foreign currency denominated EBITDA, as you can see, which brings a natural hedge to our system. When we take a look at the EBITDA percent development in year, Hyfood reaching to 14.7%. As you can see from 2022, it increased to almost 15%. Middle East to 21.4%. Central Asia, you see over the years a success story here reaching to 16.5% Central Asia EBITDA margin that we delivered in Q3. In terms of balance sheet discipline, prudent financial management priorities continue to be our key pillars as part of our capital strategy. We mentioned it before, but let me remind you what they were. Maintain and improve strong liquidity, strengthen balance sheet, and drive company's leverage position to a healthier level. Here you can see the results. The key focus and high focus on working capital continued this quarter as well. Net Debt to EBITDA is below 2, 1.98 in terms of covenant calculation, which is below 2, in line with our targets. As management team, we aim to sustain and decrease this number over the coming quarters and years as well. You can see the working capital improvement versus prior year. It is 22 days efficiency versus prior year, mainly driven by inventory. Very focused and effective inventory management. From 97 days, we reached to 80 days. We kept the accounts payable and accounts receivable. We were able to decrease our DSO number by five days, reaching to 71 days, and in total, 94 days. Closing the open position as part of strengthening balance sheet continues. As you can see on the page, we continued to hedge our food open position, which came to a very healthy level right now. As of September year-to-date, 71% of the total position on the balance sheet is closed, locked. We are protected against any FX volatility and fluctuations that may come. We aim to sustain this number over the coming quarters as well. We currently have a very healthy balance sheet, and we continue to have this very healthy balance sheet over the coming quarters and years as well. As Mete Bey mentioned at the beginning, we updated our guidance. Next page, please. As you can see, we updated our numbers, increased our numbers each quarter. What we are saying is, we are very comfortable that we will reach by the end of the year 42.5 billion Turkish lira by the end of 2023, and we will reach 19.75% EBITDA margin. As our CEO also mentioned, we continue to have a very strong quarter four as well. Last page, we wanted to show you the progress of Ülker Bisküvi in the last 10 years, how we started with 11.5% EBITDA margin. Now it looks like we are going to close the year at minimum 19.8% EBITDA margin reaching to 42.5 million TRY. You can see the trend and improvement over the years as well. That's all from my side. Thank you, Beste. Thank you, everybody. Now we are open for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a three-tone prompt acknowledging your request. If you would like to withdraw your question, please press the star followed by the two. Once again, to register for an audio question, please press the star followed by the one. There will be a brief pause while questions are being registered. Once again, ladies and gentlemen, to register for a question, please press the star followed by the one on your telephone keypad. Thank you. Our first question comes from Ece Mandacı from ÜNLÜ Securities. Please go ahead. Your line is open. Hi. Congratulations on the strong performance, especially on the free cash flow side. I was wondering if this very good performance in your working capital will continue in the fourth quarter and in 2024 as well. Secondly, should we, or do you, potentially see a potential dividend payment from the 2023 earnings next year with the strong figures? Thank you very much. Thank you for the question. Regarding your first question, the answer is yes. You have seen the working capital improvement and our focus to manage working capital in a much more effective and efficient way each quarter. This quarter, we will continue the same strategy, definitely, and it will continue throughout 2024 as well. Since it's in line with our three key priority capital strategy that I have mentioned to you before. Dividends payment requires a board approval. We have not made any decision on that yet, and once we make the decision, we will let you know. Thank you. Thank you. As a reminder, to register for a question, please press the star followed by the one on your touch tone phone. The next question comes from Cemal Demirtaş from Ata Invest. Please go ahead. Your line is open. Thank you for the presentation, congratulations for very good results. My question is related to your guidance. When I look at your revenue guidance, if that's the number we are going to be reaching, 42.5 billion TRY, then in the fourth quarter, we may have only 16% growth with that assumption. Don't you think that your assumptions are very cautious? That's my question, because you mentioned that fourth quarter is also doing well. I wonder the reason behind that conservative guidance I see. I would like to congratulate with your balance sheet, to be honest, after a very long time, we are much more comfortable. Also about the visibility, thank you for that. Again, after this comment, I would like to understand, could you give any indication about the raw material cost side for 2024? Maybe it's very early. Again, when we look for the future, especially for 2024, what might be the risks and potential rewards ahead? Thank you very much. Samar, thank you very much for the question. Regarding your first question about the top line growth in terms of Q4, you are absolutely right. There is some room in terms of further growth. This is the worst-case scenario. On the other hand, we are going to have some big maintenance studies in some of our factories. We are going to make some maintenance study almost more than 10 days in some of our big lines. That's why we take this factor in terms of supply as well, that this is going to be the minimum scenario for sure. Regarding your second question for raw materials, especially projections for next year. Raw materials are, of course, much better in terms of supply. In terms of COVID period of time, we had huge increases as of two years ago, three years ago, even last year. This year and next year, we are expecting more stable, only excluding cocoa and sugar. Right now, cocoa prices are the highest prices as of 46 years. 50% of our business is cocoa, as you know. We are having long-term projections, long-term contracts, so we are trying to get our position. Of course, there's going to be some price increases in cocoa and cocoa-related products, chocolates and others. This is almost affected to all industry all around the world. Also one of our biggest chances are competition in terms of adjacent categories like desserts, patisseries, and so on. Our prices are still very competitive. Excluding cocoa and sugar, we are not expecting very high price increases. Cocoa and sugars, we need to manage in a proper way for next year. Hello? Hello. Thank you. Thank you. Okay. Thank you. The next question comes from Dmitry Ivanov from Jefferies. Please go ahead. Your line is open. Thank you very much for the presentation and the conclusions about the results. I have three questions, if I may. The first question is about your capital allocation strategy. Basically, your cash position is quite decent, right? Approximately $350 million. I just wonder, what's your plans regarding this cash position? Do you plan to accumulate more cash, or you plan to use this cash for debt reduction? Or do you have other use of this cash, for example, any M&As in your pipeline? Any kind of thoughts on your capital allocation strategy, going forward would be helpful. The second question, if I understand correctly, you have this slide with the total debt, and approximately 17% of the total debt is the short-term debt. 17% of 1 billion is approximately $170 million to be repaid in the next 12 months. Could you kind of unpack this number for us? What's included in this 17% or $170 million U.S. short-term debt maturities? Because it's quite material amount for the business. Second, sorry, and the final question. Again, I understand it's a bit too early, but maybe, could you kind of update us on your strategy with regards to the upcoming maturity of the bond at the end of 2025? What's your current thoughts on the bonds? Thank you. Three questions from me. Thank you for the questions. Let me get all of them one by one. Regarding your first question, capital allocation, I'm going to link it with the third question. We have very important key milestones in front of us. One of them is Eurobond financing, which is approximately $600 million after the $50 million bonds buyback deducted. We have to accumulate cash to make sure that we will be able to refinance it. Based on our three key priority capital strategy, decrease leverage, and we plan to hopefully decrease the total amount, not fully refinance the full Eurobonds and decrease the amount with the accumulated cash we will have to decrease our leverage further to strengthen our balance sheet further. No any other plans in terms of capital allocation. Approximately within the next three years, our capital allocation and strategy is very clear, which I highlighted with three key priorities. Let me jump into your third question, which is Eurobond financing. Yes, it is going to mature in 2025, but we have already started working on our plan, and roadmap how to tackle it one by one. We are going to start the studies in 2024. Definitely it will be refinanced prior to 2025 before the maturity. We are going to start to kick off the process pretty shortly, I can tell you. Regarding your short-term debt, it consists of mainly letter of credits and a short-term liability of Önem that is going to mature in April 2024. The other one is letter of credits, which is part of our operations and part of our routine business. Nothing significant and nothing we see as a risk within that context as well. Thank you. Basically, the majority of this short-term debt, 17% or TRY 170 is Önem? Debt and the letter of credit. Yes it's TRY 117. Letter of credits that we use to purchase cocoa, okay, and the other credit that is going to mature in April. Yes, definitely. Understand. Thank you very much. Thank you. Thank you. As a reminder, to register for a question, please press the star followed by the one. Our next question comes from Hanade Qasiran from J.P. Morgan. Please go ahead. Your line is open. Thank you very much for the presentation. I have a follow-up question on your margins. I don't know, but I presume inventory may also play the role in expanding the gross margin. Maybe I am wrong. You are now running at a very high, very strong operating margin. Do you think that you can sustain this margin into 2024 if cost base is stabilized? The second question is about your raw material contracts. Can you please remind us how much have you secured on the cocoa side for next year and also palm oil? I think you are worried about sugar prices, but I thought Turkey is a regulated market. I don't know if you have lower contracts here. Can you please elaborate this one? The final question is about the consumption trends, particularly in Turkey. Have you started to observe any sort of slowdown or demand is still firm in Turkey? Thank you. Thank you, Hanade. Regarding your first question about the margins, gross margins, and the net margins, we are confident with our consolidated numbers and also year-end target actually for the next year as well, because we prepared all our AOP plans based on this data. Absolutely you are right because for this year especially, there was some inventory impact on the margins in the Turkish companies due to a very fast FX rate increase. However, we are confident to sustain our margins accordingly based on our year-end numbers, year-end projections. Second question about the positioning with cocoa and sugars, especially. Cocoa, we are having a policy about 12 months, sorry, 12 months rolling position. It may change, depends on the price trends, but right now we are almost covered for 12 months. Of course, it's increasing. The prices are increasing, but we can foresee our next 12 months accordingly. In sugars, coming to sugar, you are right again, this is a regulated market. The interest rates are quite high right now. Our procurement teams and finance teams are working together to choose the right strategy, balanced strategy. We are always covered like for two, three months, but beyond two, three months, we are deciding based on the benefits versus interest rates. The third question about slowing down all the markets. We don't expect any slowdown in our category. Right now it is increasing very fast in terms of volume as well, it's growing. Maybe in the second quarter, third quarter, there might be some slowdown. Again, we are confident in terms of our category. As I mentioned in the beginning of my presentation, our categories are having strong advantage, competitive advantage in terms of pricing, consumption habits versus adjacent categories. We can expect some shift from adjacent categories to our strengthening category, which is going to beneficial for us. All right. Perfect. Thank you very much, Mete. Thank you. Thank you. There appear to be no further questions. I'll return the conference back to the speakers. Thank you. This does conclude today's conference call. Thank you all for attending. You may now disconnect your lines.