Arçelik (ARCLK) Q4 2025 earnings summary

Executive summary

• Full-year 2025 revenues reached TRY 523.9 billion, reflecting a 6.6% real year-on-year decline amid challenging market conditions and hyperinflation, but profitability improved due to cost execution, restructuring, and EBITDA recovery.

• Free cash flow turned positive at TRY 5.7 billion, a significant turnaround from the previous year's negative figure, supporting deleveraging.

• Post-merger integration and synergy realization in Europe largely completed, with plant closures in Poland, Italy, and Thailand as part of global restructuring.

• Maintained leadership in the European MDA market despite market stress, with market share gains and robust growth in Africa and APAC offsetting weak demand.

• Hyperinflation accounting (TAS 29/IAS 29) was implemented, restating prior periods and impacting comparability.

Financial highlights

• Consolidated revenues declined 6.6% year-on-year to TRY 523.9 billion, mainly due to weak demand and unfavorable price/product mix.

• Gross margin improved to 28.8%, up 1.2–1.8 points year-on-year, driven by lower raw material costs and favorable currency effects.

• Adjusted EBITDA margin rose by 0.6 points to 5.9%; Q4 saw a 2.7-point improvement.

• Net loss attributable to shareholders was TRY 8.36 billion, with a -1.6% net margin, but net income improved from the prior year.

• Free cash flow was TRY 5.7 billion, compared to negative TRY 11.4 billion in 2024.

Outlook and guidance

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

• Net working capital to sales ratio expected around 20–22%, with CapEx planned at approximately EUR 250 million.

• Macroeconomic uncertainty and weak demand expected to persist, but gradual normalization anticipated.

• Ongoing performance obligations to be recognized as revenue in future periods total TRY 7.2 billion.

• The company is assessing the impact of new accounting standards, including TFRS 18, effective from 2027.