ARÇELİK A.Ş. — Interim / Quarterly Report 2023

Apr 19, 2023

1Q23 Financial Results

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April 19, 2023

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Sensitivity: Public

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1Q23 HIGHLIGHTS

Continued resilience of revenue growth.. Raw material costs eased on both y/y & q/q while higher OPEX/Sales pressured EBITDA margin..

TRY39.9bn

Revenue

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Revenue growth of 42% y/y driven by price increases, TRY depreciation and inorganic revenue contribution. Organically, annual growth was 36%.

9.3%

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Strong wholesale market in Türkiye in 2M23 while consumer demand has been negatively affected by the earthquake in Türkiye in February, following an annual growth in January.

EBITDA Margin

24.4%

OPEX / Sales

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Demand remained under pressure in international markets, particularly in Western & Eastern Europe. EBITDA margin was 9.3%, up by 11 bps q/q while contracted by 137 bps y/y due to higher OPEX/Sales.

22.7% Net Working Capital/Sales was 22.7% as of 1Q23, up by 1.7% compared to 2022 year-end mainly as a result of increased receivables.

NWC / Sales

2.56x

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Leverage was 2.56x, up by 0.32x (including 0.20x of FX conversion impact) compared to 2022 year-end due to increased funding needs.

Leverage

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Key Factors Sales / Margins

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REVENUE GROWTH GROSS MARGIN
42% [] 31.1%
Price increases on both q/q & y/y Lower raw material costs on both q/q & y/y
TRY depreciation on y/y Favorable EURUSD parity on q/q
Slightly higher MDA6 units sold in Turkey on a
Lower capacity utilisation on y/y
yearly basis
Inorganic revenue growth on y/y
39,192 39,891 30.9% 31.1%
29.0%
28,162
TRYmn
1Q22 4Q22 1Q23 1Q22 4Q22 1Q23
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1Q23 Financial Results

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EBITDA MARGIN

9.3%

Better gross profitability on both q/q & y/y

Increased OPEX/Sales on both q/q & y/y due to higher G&A

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10.5%
9.1% 9.3%
1Q22 4Q22 1Q23
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*Includes inorganic revenue contribution of Indesit International JSC and Whirlpool RUS LLC and Asogem acquisitions. Organically, annual revenue growth was 36% in 1Q23. Sensitivity: Public

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Operational Performance

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1Q23 Financial Results

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Steady solid revenue growth momentum maintained in Türkiye 1Q23 Financial Results driven by higher units sold and strategic pricing initiatives

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MDA6*

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ARÇELİK y/y growth (%)
TÜRKİYE y/y growth (%)
7% 13%
(12%) (11%)
2M22 2M23
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AIR CONDITIONER*

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ARÇELİK y/y growth (%)
TÜRKİYE y/y growth (%)
26%
14%
(3%)
(17%)
2M22 2M23
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TELEVISION**

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ARÇELİK y/y growth (%)
TÜRKİYE y/y growth (%)
18%
6% 6%
(13%)
2M22 2M23
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Türki e Revenue Growth y

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79%
20%
15,024
12,522 Unit growth in MDA6 (sell-in)
8,379
Price increases
TRYmn
1Q22 4Q22 1Q23
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Türki e Share in Total Revenue y

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1Q23
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30% 38%
1Q22
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*MDA6 and A/C data (sell-in, in unit terms) is based on WGMA for 2M23 period on a cumulative basis.

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**TV market reflects the data of a retail panel market for 2M23 period in unit terms on a cumulative basis. Sensitivity: Public

15%

Share in total revenue

The demand for MDA6 in Western and Eastern Europe remained weak 1Q23 Financial Results as the increased cost of living continued to affect spending priorities

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23%
Share in total Western Europe
revenue
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MDA6 Market

y/y market growth in unit terms

MDA6 Market

Eastern Europe

y/y market growth in unit terms

W. Europe

Germany

France

Great Britain

Italy

Spain

Belgium

2M23

• The slowdown in consumer demand in the Western European market throughout 2022 remained persistent in the first two months of 2023, leading to a high single digit contraction in unit terms on a yearly basis.

• Price increases implemented across the industry were offset the unit contraction to some extent, yet the market has been contracted in value terms at low single digit percentage.

• Cycling a high growth last year, consumer demand has fallen the most in Germany, while strikes in France have affected the market.

Arçelik in Western Europe

• The decrease in units sold was somewhat offset by higher prices, but this still led to a decline in revenue of around mid-single digits in EUR terms y/y in 1Q23.

• Consumer demand in Eastern European market contracted by slightly higher than 20% y/y in in unit terms in the first two months of 2023, mainly due to the strong performance achieved in the same period of the last year.

• Ongoing political and macroeconomic challenges were among other factors behind the demand contraction.

• Despite industry-wide price increases, the market shrank by roughly a mid-teens percentage in value terms during the first two months of 2023 on a yearly basis.

Arçelik in Eastern Europe

• 41% y/y revenue growth in EUR terms thanks mainly to price increases, higher units sold and inorganic growth. Organically, revenue growth was 16%.

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2M23

E. Europe

Russia

Poland

Romania

Austria

• Beko remained as the top brand in the U.K. in unit terms. (20%) (10%) 0% 10% 20%

(30%) (20%) (10%) 0% 10% 20% 30%

MDA6 market charts and the market positionings reflect the data of a retail panel market. Eastern Sensitivity: Public European MDA6 market chart excludes Ukraine’s figures.

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The ongoing decrease in demand is having an adverse effect on Africa, the Middle East, and APAC operations

1Q23 Financial Results

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9%
Share in total
revenue
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Africa & Middle East

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14%
Asia-Pacific Share in total
revenue
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• Revenues generated from Africa & Middle East contracted by c.14% y/y in 1Q23 in EUR terms primarily due to weak performance of MENA operations.

• Revenues from APAC were down by c.18% in EUR terms in 1Q23 y/y. The contraction was primarily as a result of lower sales contribution from Arçelik-Hitachi business due to weak demand environment.

• Defy’s domestic and export unit sales were contracted in the first quarter on a yearly basis due to declining markets.

• Unit contraction was partially offset by price increases, yet Defy’s revenues declined by c.4% in ZAR terms. In EUR terms, Defy’s revenue was contracted at around mid-teens percentage, reflecting the depreciation of ZAR against EUR.

• Consumer demand in South Africa was significantly down at high-teens percentage, reflecting ongoing macro challenges. Defy maintained its strong market leadership as of February 2022.

• In Pakistan, further depreciation of PKR against EUR, lower units sold due to deteriorated consumer sentiment and recently imposed import constraints on raw materials, have resulted in annual revenue contraction of c.32% in EUR terms in 1Q23. In PKR terms, thanks to price increases, revenue contraction was c.7% in the same period.

• In Bangladesh, macroeconomic challanges and early monsoon has affected the market. Net sales were down by c.4% in BDT terms in 1Q23 y/y as a result of lower units sold. In EUR terms, net sales were down by c.19% due to continued depreciation of BDT against EUR.

• Beko Egypt’s revenue declined by c.1% y/y in 1Q23 in EUR terms. Strategic pricing has mitigated the unit contraction.

• Compared to the first two months of 2022, MDA6 market remained flattish in Egypt. In this period, Beko substantially increased its market share in the country, in both unit and value terms.

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Lower raw material prices in 1Q23 compared to a year ago

1Q23 Financial Results

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Average Metal Prices Index - Market

Average Plastic Prices Index - Market

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1Q23 111
2022 122
4Q22 102
3Q22 110
2Q22 136
1Q22 141
2021 127
4Q21 132
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1Q23 154
2022 175
4Q22 156
3Q22 176
2Q22 195
1Q22 175
2021 159
4Q21 166
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• In anticipation of an improved demand outlook resulting from the alleviation of recessionary concerns on a global scale and the lifting of COVID restrictions in China, metal raw material prices increased on a quarterly basis.

• Plastic raw material prices were stable in 1Q23 compared to a quarter ago while significantly contracted compared to a year ago as a result of lower demand and decreased energy and transportation costs.

• Turkey experienced a more significant rise in metal raw material prices, primarily driven by tax hikes on steel products and the sudden surge in demand & the decline in supply after the earthquake.

Source: Steel BB, Steel Orbis

Index includes: CRC, HRC, Galvanized Steel, Stainless Steel, Copper, Aluminium

Source: ICIS - Chemical Industry News & Chemical Market Intelligence Index includes: ABS, Polystyrene, Polyurethane, Polypropylene

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Sales Performance

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1Q23 Financial Results

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Resilient revenue composition through diversification

Sales Bridge

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41.6% y/y
1.047
4.863
6.645 (828) 5.3%
4.2% 24.6%y/y y/y 24.867
79.3% y/y 40.501
19.786 y/y 34.809 35.638
28.164
15.024
TRYm 8.379
1Q22 TR Organic INT Organic INT FX Acquisition 1Q23
Impact Impact
International Türkiye
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1Q23 Financial Results

Sales Breakdown by Geography

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1Q23
Türkiye
12%
Western Europe
2%
2% 15%
4% 2% 30% 38% CIS & Eastern Europe
4%
5% Africa
6%
1Q22
Middle East
5%
Pakistan
15%
11%
27% Bangladesh
Other
23%
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Financial Performance

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1Q23 Financial Results

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Summary financials

1Q23 Financial Results

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TRYmn 1Q23 1Q22 y/y 4Q22 q/q	TRYmn 1Q23 1Q22 y/y 4Q22 q/q	TRYmn 1Q23 1Q22 y/y 4Q22 q/q	TRYmn 1Q23 1Q22 y/y 4Q22 q/q	TRYmn 1Q23 1Q22 y/y 4Q22 q/q	TRYmn 1Q23 1Q22 y/y 4Q22 q/q
Revenue	39.891	28.164	42%	39.192	2%
Gross Profit	12.416	8.687	43%	11.377	9%
EBIT	2.693	2.282	18%	2.663	1%
EBIT - exc. one-off items	2.693	2.282	18%	2.663	1%
Profit Before Tax	710	1.451	(51%)	2.231	(68%)
Net Income	1.159	1.224	(5%)	2.664	(57%)
Net Income -exc. one-off items	1.159	1.224	(5%)	1.265	(8%)
EBITDA	3.691	2.993	23%	3.582	3%
EBITDA -exc. one-off items	3.691	2.993	23%	3.582	3%
Gross Profit Margin	31,1%	30,8%	28 bps	29,0%	210 bps
EBIT Margin	6,8%	8,1%	(135 bps)	6,8%	(4 bps)
EBIT Margin -exc. one-off items	6,8%	8,1%	(135 bps)	6,8%	(4 bps)
Net Profit Margin	2,9%	4,3%	(144 bps)	6,8%	(389 bps)
Net Profit Margin -exc. one-off items	2,9%	4,3%	(144 bps)	3,2%	(32 bps)
EBITDA Margin	9,3%	10,6%	(137 bps)	9,1%	11 bps
EBITDA Margin -exc. one-off items	9,3%	10,6%	(137 bps)	9,1%	11 bps

EBIT was calculated by deducting the impact of FX gains and losses arising from trade receivables & payables, credit finance income and charges and cash discount expense and adding income & expenses from sale of property plant and equipment.* Sensitivity: Public Net income before minority

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Higher leverage due to increased funding needs

1Q23 Financial Results

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Net Debt & Leverage
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3,00 2.81 50.000.000
2.56 45.000.000
2,50 2.24 40.000.000
32,561 35.000.000
2,00
26,858 30.000.000
1,50 22,557 25.000.000
20.000.000
1,00
15.000.000
10.000.000
TRYmn 0,50
5.000.000
0,00 0
3M22 2022 3M23
Net Debt Leverage
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Debt Currency & Rates Breakdown

Currency	Effective Interest Rate	Original Currency	TRY Equivalent	Share
	p.a.	(mn)	(mn)	(%)
TRY	24,2%	4.194	4.194	7,2%
EUR	3,7%	1.022	21.261	36,8%
USD	5,3%	119	2.286	4,0%
GBP ZAR	0,0% 9,4%	7 1.095	169 1.163	0,3% 2,0%
AUD PKR	5,3% 19,6%	29 29.462	372 1.982	0,6% 3,4%
BDT	7,5%	7.110	1.270	2,2%
RON PLN	7,4% 7,9%	145 73	605 325	1,0% 0,6%
NOK	4,1%	33	60	0,1%
SEK	4,0%	98	179	0,3%
IDR	8,4%	92.737	118	0,2%
MYR	6,0%	32	141	0,2%
THB	4,9%	370	207	0,4%
TOTAL LOANS			34.338	59,4%
USD	5,0%	512	9.810	17,0%
EUR	3,0%	359	7.466	12,9%
TRY	26,4%	6.239	6.239	10,8%
TOTAL BOND			23.514	40,6%
TOTAL			57.852

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Cash Currency Breakdown Debt Currency Breakdown Debt Maturity Profile
TRY29.3bn (EUR1.4bn) TRY57.9bn (EUR2.8bn) TRY57.9bn (EUR2.8bn)
15% 11% 7%
Other Other 21% 16% 2027+
6% USD 2026
TRY USD49% 18%TRY 2% 202362%
2025
30% 13%
EUR 2024
50%
EUR
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Higher G&A resulted in EBITDA margin contraction y/y Increase in working capital led to negative FCF

1Q23 Financial Results

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EBITDA Margin

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1Q22 1Q23
Non-cash
GP Margin OPEX/Sales
Items
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Working Capital/Sales

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22.7%
21.0%
2022 1Q23
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CAPEX/Sales

Free Cash Flow

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3.9%
2.7%
1Q22 1Q23
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(1,801)
TRYmn (3,228)
1Q22 1Q23
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Guidance

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1Q23 Financial Results

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2023 Guidance

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Revenue

1Q23 Financial Results

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• Turkey (in TRY) c.45% growth

• International (in FX) c.6% growth

• • Consolidated (in TRY) c.45% growth

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EBITDA Mar in c.10%
g
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WC/Sales 23% - 25%
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CAPEX c.300 mio EUR
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Q&A

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1Q23 Financial Results

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Appendix

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1Q23 Financial Results

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Margins by segments

1Q23 Financial Results

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Consolidated

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30,8% 31,1%
29,0% 50.000
30,0%
45.000
39.192 39.891
25,0% 40.000
35.000
20,0% 28.164 30.000
25.000
15,0%
20.000
10,0% 15.000
10.000
5,0%
5.000
0,0% 0
1Q22 4Q22 1Q23
Revenue Gross Margin
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Consumer Electronics

White Goods

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35,0% 32,3% 45.000 8.000
31,0% 30,0% 28,0%
30,0% 29,1% 40.000 25,6% 7.000
30.785 35.000 25,0% 6.000
25,0% 29.617 20,0%
30.000
20,0% 5.000
20,0% 22.185 25.000
15,0% 20.000 15,0% 3.372 2.956 4.000
3.000
10,0% 15.000 10,0% 1.822
2.000
10.000
5,0% 5.000 5,0% 1.000
0,0% 0 0,0% 0
1Q22 4Q22 1Q23 1Q22 4Q22 1Q23
Revenue Gross Margin Revenue Gross Margin
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Other

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35,0% 32,5% 10.000
30,8%
29,3% 9.000
30,0%
8.000
25,0% 6.203 6.151 7.000
6.000
20,0%
4.157 5.000
15,0% 4.000
10,0% 3.000
2.000
5,0%
1.000
0,0% 0
1Q22 4Q22 1Q23
Revenue Gross Margin
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Close watch on FX risk, proactively taken actions

1Q23 Financial Results

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3,9%
500 2,9% 1,7% 2,9% 4,0% TRYm Before Hedge Hedged Position Net Position
0 2,0%
-500 0,0% EUR (15,030) 13,917 (1,112)
0,7%
-1,2% -1.000 0,3% 0,3% -2,0%
-0,5%
-1,2% -1,2% USD (2,044) (42) (2,087)
-1.500 -1,7% -4,0%
-2,6%
-3,6% -2,9% [-2,4%] -3,2%
-2.000 -6,0% GBP 1,250 (1,109) 141
-5,1%
-4,1%
-2.500 -6,6% -8,0%
Other (466) 136 (330)
-3.000 -10,0%
-3.500 -12,0% TOTAL (16,290) 12,902 (3,388)
-4.000 -14,0%
-13,0%
Net FX Position / Equity (13.0%)
Net FX Position Net FX/Equity
18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2 19 Q3 19 Q4 20 Q1 20 Q2 20 Q3 20 Q4 21 Q1 21 Q2 21 Q3 21 Q4 22 Q1 22 Q2 22 Q3 22 Q4 23 Q1
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• FX hedging is a strictly pursued policy in Arçelik since more than 30 currencies are actively managed in global operations.

• It is a KPI for the company management not to have a FX exposure exceeding low single-digit % of equity.

• The primary strategy on balance sheet hedging mainly through cash, receivables, payables and financial liabilities, and the remaining part is hedged through financial derivatives.

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Contacts

Özkan Çimen

Özkan Çimen Mine Şule Yazgan CFO Finance & Enterprise Risk Executive Director (+90) 212 314 39 01 (+90) 212 314 30 60

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1Q23 Financial Results

Öktem Söylemez

Investor Relations Lead (+90) 212 705 96 81

www.arcelikglobal.com investorrelations@arcelik.com

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1Q23 Financial Results

Disclaimer

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This presentation contains information and analysis on financial statements as well as forwardlooking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the information and analysis are correct and expectations reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially.

Neither nor of its or nor other shall have Arçelik any managers employees any person any liability whatsoever for any loss arising from the use of this presentation.

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Thank You!

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