Q2 2024 Arcelik AS Earnings Call Transcript
Key Points
- Arcelik AS (IST:ARCLK) completed a significant transaction with Whirlpool, consolidating Beko Europe's financials, which is expected to enhance growth strategy.
- The acquisition of Whirlpool's MENA operations, including UAE and Morocco, is anticipated to expand Arcelik's market presence in these regions.
- Beko Europe, post-transaction, has become the number one player in Europe, with a substantial increase in production facilities and workforce.
- The transaction is expected to generate potential synergies, including optimized production lines and procurement savings, estimated to save around EUR300 million by the fifth year.
- Despite challenging market conditions, Arcelik achieved a 23% year-on-year revenue growth in the second quarter, driven by inorganic growth from the transaction.
- Arcelik's EBITDA margin was diluted by approximately 200 basis points due to higher production costs and increased operating expenses in Europe.
- The company reported a net loss of TRY0.8 billion in the second quarter, with a decline in net margin year-on-year and quarter-on-quarter.
- International revenues decreased substantially by 11% year-on-year in real terms, reflecting weaker consumer demand globally.
- The company's leverage increased to 3.45 times, indicating higher financial risk compared to previous quarters.
- Arcelik's gross profit margin declined by 3.4 points year-on-year due to rising material costs and challenging pricing environments.
Ladies and Gentlemen, thank you for standing by. I am Konstantinos your Chorus Call operator. Welcome and thank you for joining the Arçelik conference call and Live Webcast to present and discuss the second quarter 2024, financial results.
At this time, I would like to turn the conference over to Mr. Ozkan Cimen, Chief Financial Officer; Mr. Ragıp Balcıoglu, CEO; and Beko Europe, Ms. Mine Sule Yazgan, Finance & ERM Executive Director; Ms. Delal Alver, Capital Market Compliance Senior Lead; and Mr. Sezer Ercan, Investor Relations Senior Lead.
Mr. Cimen you may now proceed.
Good morning and good afternoon, Ladies and Gentlemen. Welcome to our second quarter '24, financial results webcast. This presentation contains the company's financial information prepared according to TFRS by application of IAS 29 inflation accounting provisions.
Before we go into the details regarding the performance of the company in the second quarter, I would like to remind you that we have started to fully
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