Arçelik (ARCLK) Q4 2025 earnings summary

Executive summary

• Generated TRY 523.9 billion in revenues for 2025, a 6.6% real year-on-year decline, with improved profitability and robust free cash flow driven by cost execution, restructuring, and disciplined capital management.

• Gross margin improved by 1.8 percentage points year-on-year, with a 2.2 percentage point improvement in Q4 versus prior year.

• Free cash flow reached TRY 5.7 billion, a strong recovery from last year's negative TRY 11.4 billion, supported by operational performance and strict CapEx and working capital management.

• Significant deleveraging achieved through strong free cash flow, with notable progress in post-merger integration and synergies in Europe.

• Implemented hyperinflation accounting (TAS 29), restating prior periods and expressing all figures in terms of purchasing power as of December 31, 2025.

Financial highlights

• Revenue declined 6.6% year-on-year to TRY 523.9 billion, with international sales down 13.5% and Türkiye sales up 0.9% in real terms.

• Gross profit margin reached 28.8%, up from 27.6% in 2024, aided by lower raw material costs and favorable euro-dollar parity.

• Adjusted EBITDA margin improved by 0.6 percentage points year-on-year to 5.9%.

• Net loss attributable to equity holders was TRY 8.36 billion, compared to a net profit of TRY 2.21 billion in 2024.

• Free cash flow turned positive at TRY 5.7 billion, compared to negative TRY 11.4 billion in 2024.

Outlook and guidance

• 2026 guidance targets broadly flat real revenue growth in Turkey, low single-digit euro-based growth internationally, and an adjusted EBITDA margin of 6.25% to 6.5%.

• Net working capital to sales ratio expected around 20-22%, with CAPEX guidance at approximately EUR 250 million.

• Macroeconomic uncertainty and weak demand expected to persist, but potential upside from policy rate cuts and possible Russia-Ukraine ceasefire.