Earnings Release • Mar 3, 2025
Earnings Release
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2024 EARNINGS RELEASE
As required by the Capital Markets Board, our 2024 financials have been adjusted to account for the effects of inflation pursuant to TAS 29 ( "Financial Reporting in Hyperinflationary Economies"). For this reason, all financial statements presented herein, including comparative data from earlier reporting periods, have been restated in accordance with TAS 29 to account for changes in the overall purchasing power of the Turkish lira. The resulting figures are indicative of the Turkish lira's purchasing power as of 31 December 2024.
| (TRL million) | 2023 | 2024 | % |
|---|---|---|---|
| Net Sales | 3,265 | 2,712 | -17% |
| Gross Profit | 1,524 | 1,388 | -9% |
| EBITDA (BNRI) (1) | 733 | 549 | -25% |
| Net Profit/(Loss) before Tax | 637 | 76 | -88% |
| Net Profit/(Loss) | 629 | 19 | -97% |
| Net Working Capital | 771 | 807 | 5% |
| Net Financial Debt | 271 | 348 | 29% |
| Free Cash Flow | 155 | (34) | n.m. |
| Gross Profit Margin | 47% | 51% | |
| EBITDA (BRNI) Margin (1) | 22% | 20% | |
| Net Profit Margin | 19% | 1% |
All figures and tables in this report include IFRS16 impact.
(1) BNRI: Before non-recurring items
2024 gross profit was down by 9% compared to 2023 and amounted to TRL 1,388 million. The company's gross profit margin also improved significantly in 2024, reaching 51%, or 400 basis points above its 2023 figure. When we exclude the effects of TMS 29, our gross profit shows a remarkable 1.4-fold increase, reaching TRL 1,400 million. Similarly, our gross profit margin shows a substantial improvement, rising by 300 basis points to 60%.
Turkey's inflationary environment and the associated rise in costs and operating expenses impacted BNRI EBITDA, which declined by 25% year-on-year to TRL 549 million. The BNRI EBITDA margin also decreased, falling by 200 basis points to 20%. Excluding the effects of TMS 29, BNRI EBITDA increased by 13% to TRL 609 million while the BNRI EBITDA margin decreased by 500 basis points to 26%.
Net Working Capital (TRL million) Net Working Capital/Net Sales (%)
capital requirement was TRL 807 million. Through effective balance sheet management, the company managed to keep the year-on- year increase in NWC to 5%, well below every posted rate of inflation.
That said, Adel's net working capital/ net sales ratio, which was 24% at end-2023, weighed in at 30% as of end-2024.
Net Financial Debt (TRL million) Net Financial Debt/EBITDA (BNRI)*
than what it was at end-2023. As of end-2024, Adel's net working The company's as of end-2024 net financial debt was up by 29% yearon-year and weighed in at TL 348 million as of end-2024. Adel's Net Debt/EBITDA (BNRI) ratio, which was 0.4 at end-2023, increased to 0.6 as of end-2024.
* The Net Debt/EBITDA (BNRI) ratio is calculated on the basis of the previous twelve months' EBITDA (BNRI) figures.
-34 155 2023 2024 Free Cash Flow (TRL million)
As of end-2024, Adel showed a negative free cashflow of TRL 34 million. This is TRL 189 million less
Financial Risks: In accordance with the dynamics of the industry in which our company operates and the financial instruments it employs, our company may be subject to a variety of financial risks, including mainly interest rate risk, currency risk, liquidity risk, and receivables risk. Our company meticulously defines, assesses, and manages risks in order to mitigate the impacts of these risks, which are related to uncertainties and market fluctuations.
Within the framework of our risk management strategy, potential risks are systematically mitigated and their impacts are reduced through the implementation of established procedures and policies. In this context, our company adopts a proactive approach to ensure financial sustainability and operational assurance.
Interest Rate Risk: Aligning with the requirements of the industry in which it operates, our company operates with high working capital during the first nine months of the year, which increases its sensitivity to changes in credit interest rates. Fluctuations in interest rates may occur due to geopolitical risks and macroeconomic indicators in our country.
Our company finances its net working capital needs that may arise in the course of its operations through equity and, when necessary, loans. Measures taken against liquidity risk and interest rate risk include closely monitoring the maturity structure
of loans, extending short-term liabilities to longer terms, bond issuances, evaluating receivables through discounting methods, and diversifying funding sources with alternative financing instruments. In this context, our company maintains a dynamic approach to financial planning.
By virtue of our disciplined and effective financing policies, our operations are supported by borrowing costs below market interest rates. In the upcoming period, we will continue to prioritize efficiency in financial management to ensure the sustainability of our robust balance sheet.
Currency Risk: Our company is exposed to currency risk due to its commercial activities, as its foreign currency liabilities exceed its foreign currency assets. To mitigate the impacts of this risk and protect against cost fluctuations, derivative financial instruments are employed as a hedge against currency risk.
In line with our risk management policy, at least 50% of the currency risk is hedged, thus ensuring that the impact of exchange rate fluctuations on financial performance is effectively managed. Currency risk management contributes to our company's long-term financial sustainability and strong balance sheet goals. As of 2024, our company has not been exposed to any currency risk thanks to our successful risk management strategies.
Receivables Risk: In the last quarter of the year, our company collects payments for orders received during the campaigns and trade fairs held at the beginning of the year. To minimize receivables risk and streamline collection processes, various payment systems, including credit cards, the Direct Debit System (DDS), Vinov, and checks, are effectively utilized upon the shipment of these orders.
The credit card campaigns organized in the first quarter of the year to reduce receivables risk and working capital requirements provide significant convenience in collection processes. The remaining dealer receivables are managed through other secured payment systems and open risks are mitigated by obtaining letters of guarantee. This systematic and disciplined approach of our company supports the effective management of financial risks and contributes to sustainable growth.
The diversification of payment systems not only accelerates collection processes but also plays a crucial role in maintaining the stability of our company's cash flow. In 2024, through the advance payment and credit card campaigns organized, approximately 40% of sales made to the traditional channel were collected within the campaign period, thus significantly reducing receivables risk.
| (TRL million) | 31.12.2023 | 31.12.2024 |
|---|---|---|
| Cash and equivalents | 1,146 | 659 |
| Short-term financial investments | 189 | - |
| Trade receivables | 171 | 131 |
| Inventories | 889 | 789 |
| Other current assets | 245 | 213 |
| Current Assets | 2,640 | 1,792 |
| Financial investments | 1 | 1 |
| Other receivables | 1 | - |
| Tangible assets | 804 | 790 |
| Right of use assets | 195 | 153 |
| Intangible assets | 114 | 89 |
| Other non-current assets | 44 | 17 |
| Non-Current Assets | 1,159 | 1,050 |
| Total Assets | 3,799 | 2,842 |
| Short term borrowings | 1,126 | 390 |
| Short term portion of long term borrowings | 377 | 111 |
| Trade payables | 202 | 133 |
| Other current liabilities | 331 | 193 |
| Current Liabilities | 2,036 | 827 |
| Long term borrowings | 103 | 506 |
| Long term provisions | 56 | 60 |
| Non-Current Liabilities | 159 | 566 |
| Equity | 1,604 | 1,449 |
| Total Liabilities & Equity | 3,799 | 2,842 |
| (TRL million) | 1 January- 31 December 2023 |
1 January- 31 December 2024 |
|---|---|---|
| Revenues | 3,265 | 2,712 |
| Cost of sales (-) | (1,741) | (1,324) |
| Gross Profit | 1,524 | 1,388 |
| Operating expenses (-) | (1,004) | (1,034) |
| Other Operating Income /Expense (net) | 36 | (31) |
| Operating Income | 556 | 323 |
| Income /(expense) from investment operations | 1 | (45) |
| Profit/loss shares from investments accounted through equity method | (2) | - |
| Financial income/(expense) (net) | (151) | (315) |
| Monetary gains / (losses) | 233 | 113 |
| Income/(Loss) Before Tax from Continuing Operations | 637 | 76 |
| Tax income/(expense) | (8) | (57) |
| Net Income/(Loss) | 629 | 19 |
| EBITDA (BNRI) (1) | 733 | 549 |
| Profitability Ratios | 1 January- 31 December 2023 |
1 January- 31 December 2024 |
|---|---|---|
| Gross Profit Margin | 47% | 51% |
| Operating Profit Margin | 17% | 12% |
| Net Profit Margin | 19% | 1% |
| EBITDA (BNRI) Margin (1) | 22% | 20% |
| Market Capitalization as of December 31st (TL thousand) | 7,926 | 8,701 |
(1) BNRI: Before non-recurring items
This document contains forward-looking statements concerning future performance and should be regarded as the company's good faith assumptions about the future. Such forward-looking statements reflect management's expectations based on currently available information at the time they are made. Adel's actual results are subject to future events and uncertainties that may significantly affect the company's performance.
The financial information provided below does not include the effects of TAS 29 and is provided for analysis purposes only. These figures are not compliant with the financial report for the period 01.01.2024- 31.12.2024 and have not been subject to independent audit.
| (TRL million) | 2023 | 2024 | % |
|---|---|---|---|
| Net Sales | 1,749 | 2,334 | 33% |
| Gross Profit | 997 | 1,400 | 41% |
| EBITDA (BNRI) (1) | 538 | 609 | 13% |
| Net Profit/(Loss) before Tax | 381 | 234 | -39% |
| Net Profit/(Loss) | 294 | 211 | -28% |
| Net Working Capital | 377 | 556 | 48% |
| Net Financial Debt | 187 | 348 | 86% |
| Free Cash Flow | 212 | 100 | -53% |
| Gross Profit Margin | 57% | 60% | |
| EBITDA (BRNI) Margin (1) | 31% | 26% | |
| Net Profit Margin | 17% | 9% |
*All figures and tables in this report include IFRS16 impact.
(1) BNRI: Before non-recurring items
Free Cash Flow
| Investor Relations Contact Information | ||||
|---|---|---|---|---|
| Yasemen Güven Çayırezmez CFO |
Pelin İslamoğlu Kayol Reporting and Investor Relations Manager |
Fatih Çakıcı Accounting Manager |
||
| Investor Relations Unit Manager |
Investor Relations Unit Officer |
Investor Relations Unit Officer |
||
| E | [email protected] | [email protected] | [email protected] | |
| T | 0850 677 70 00 | 0850 677 70 00 | 0850 677 70 00 | |
| F | 0850 202 72 10 | 0850 202 72 10 | 0850 202 72 10 |
www.adel.com.tr
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