Ülker Bisküvi Sanayi A.S. (ULKER) Q2 FY2025 Earnings Call Transcript & Summary

Beste, please go ahead, ma'am.

Good afternoon, everyone, and welcome to Ülker Bisküvi Second Quarter 2025 Results Webcast. Thank you for joining us today. I'm Beste Tasar, leading the Investor Relations department. I will briefly walk you through the agenda before handing over to our speakers. Our CEO, Ozgur bey, will start with an overview of the quarter's performance and key strategic highlights. Then our CFO, Fulya, will provide a detailed review of the financial results. After their presentation, we will open the line for questions. With that, let me now hand it over to our CEO, Ozgur bey. Ozgur bey?

Thank you, Beste. Good morning, good afternoon and good evening to all who are joining from different places of the world. I'm pleased to welcome you to Ülker Bisküvi's Second Quarter 2025 Earnings Presentation. Today, we will walk you through our performance, strategic initiatives and outlook. So our agenda for today is structured around 4 key points. First, we will highlight the strategic and operational achievements of the quarter. Then we will examine the macroeconomic context and its impact on our business. We will follow with a deep dive into our financial performance. And finally, we will share our outlook for the remainder of 2025. Each section reflects our commitment to transparency and long-term value creation. In quarter 2, Ülker continued to build momentum across multiple fronts. We launched new products that contributed meaningfully to our revenue, executed high-impact marketing campaigns and advanced our sustainability agenda. Our portfolio saw strong volume growth, and we maintained our leadership position in our key markets. These achievements are a testament to our team's agility and strategic focus. Looking at the macroeconomic context, the Turkish economy remains in flux. In quarter 2, GDP continues its declining trend and reached to 2%. Inflation continues to be a key challenge with 35% CPI and 24% PPI. The Central Bank's interest rate still stands at around 43% level. Despite these headwinds, Ülker has adapted its operation through dynamic pricing, cost discipline and strategic sourcing with agility. We remain vigilant and responsive to all the macroeconomic shifts that we are going through. Looking at the key raw material prices, the raw material volatility continues to impact our cost base. One of the biggest contributor is cocoa prices. We have seen huge fluctuations in cocoa prices going to the levels of GBP 9,500 levels per ton. Recently, the surge is around GBP 5,377 per metric ton. Sugar prices in a slight decline trend in GDP terms. Looking at wheat and milk, they have shown relative stability, while packaging costs, especially paper, have increased. Hazelnut is -- we are going through the hazelnut season, and it's expected to increase also. Our procurement strategy and long-term supply relationships has helped us mitigate these pressures and maintain supply chain resilience. So let me share with you today's key messages. First, we are staying agile despite a challenging macroeconomic context. Ülker has continued to deliver resilient growth driven by innovation, operational excellence and a deep commitment to our consumers and communities. Secondly, we are ensuring affordability and accessibility across all segments. Thirdly, we have strong H2 plans focusing on sustaining growth momentum. Fourthly, we are accelerating sustainable growth through technology, AI-powered procurement and operational efficiency. And next, we are committed to driving targets through impactful innovation and communication. Last but not the least, operational excellence and cost discipline remain our top priorities. We have recently introduced a continuous source-to-shelf savings program, which helps us to minimize the impact of all the cost increases in our operations. Now let's look into the new product launches that we have seen in the first half of the year. In the first half of the year, we launched several new products, some of which you see on the screen, both domestically and internationally. These launches contributed 4% to quarter 2 snacking revenue in the second quarter. Our innovation pipeline is really robust, and we are seeing strong consumer engagement. These products are not only driving incremental revenue, but also reinforcing our brand relevance in a competitive market. New product development in 3-year period contributed 12% of our quarter 2 snacking revenue, 14% domestically and 7% internationally, summing up to 12% in total. This performance highlights our ability to innovate at scale and meet evolving consumer preferences. Our teams have done an exceptional job in identifying trends, executing launches and ensuring distribution efficiencies. Our marketing campaigns have been both creative and effective. Some of -- I will give some examples from Kusura Magma to [ Original Dido Taste ] and Çizimen Osimhen celebrity campaign. You know Osimhen is a famous worldwide-known player who is currently playing in the Turkish league in Galatasaray football team. We have leveraged TV, digital, outdoor and social media to connect with consumers. These campaigns are not just about visibility, they are about building emotional resonance and driving brand loyalty and brand equity. Our partnerships with influencers have amplified our reach and relevance. Sustainability is at the core of our operations and whatever we do. We are qualified as an A rating in CDP supplier engagement assessment. We reached 100% reuse recycle of upcycling. And launched Sakliköy Biofortified biscuits in collaboration with Sabanci University, which is one of the best top universities of Turkey. This is the first time done in Turkey. Biofortification means directly sourcing from the soil itself, the nutrition elements. And in this project, Sakliköy Biofortified, we have enriched our biscuits with selenium and zinc. These efforts reflect our commitment to responsible growth. We have continued to strengthen our corporate reputation through community engagement and brand storytelling through our marketing campaigns. We launched the first My First Match campaign with major football teams, of which we are a sponsor for, provided for our consumers who never saw a football game of major football teams as an opportunity to see their first ever football game in this stadium. This really made huge engagement in the country, creating huge buzz, which is an important example of our connection with our consumers. And other initiatives from renovating something -- some examples like renovating a basketball court in Hatay, one of the key city in earthquake zone back in 2023, the earthquake, and we really supported our communities and the kids to provide them with a basketball court. Another example is our support to our Paralympic players, which also created a lot of engagement through our videos that we provided in the social media. All these efforts build trust and deepen our societal impact. These initiatives were also awarded in important platforms like we have received the S&P Global Plaque. We have -- 5 years in a row, we have been awarded as the largest food company of Turkey by one of the big business magazines of Turkey called Capital. And recently, we have also been awarded as the Happiest Place to Work in Turkey. Our people are at the heart of our success, which we always highlight in different platforms. At the Stevie Awards for great employers, we received 9 honors, including Employer of the Year. This is really what we are proud of. This recognition reflects our commitment to creating a supportive, inclusive and high-performing workplace. We continue to invest in talent development, employee engagement and workplace culture to ensure Ülker remains a top employer in the region. So now let's look into our operational performance. In the first half of 2025, we managed to increase our Türkiye revenue by 8.8% and EBITDA by 3.6% compared to the same period of last year. In our export business, our revenue grew by 8.4% and EBITDA deteriorated by 20.8%, mainly driven by the weakening correlation between inflation and Turkish lira devaluation. As of June 2025, the yearly inflation rate is 35%, whereas the Turkish lira to USD depreciation is around 21%, which is lagging behind the inflation, which explains mainly the weakening impact on this correlation. In our North Africa business, our revenue grew by 33.6%, driven by improved pricing, mix management and currency effects and EBITDA grew by 8.8%. In Middle East region, revenue grew by 1.5% and EBITDA declined by 22.1%. Higher raw material costs and increased energy costs put pressure on profit margins in both Middle East and North Africa regions. In Central Asia region, H1 performance is in line with previous year in terms of revenue and EBITDA delivery. Despite the ongoing slowdown in Kazakhstan domestic market, we achieved to recover the sales and EBITDA gap occurred in Q1 during the second quarter. On-time pricing actions and effective promotional activities have in higher sales and profitability, which resulted in a really good comeback in quarter 2. All in all, in the first half of the year, we successfully achieved growth in sales in our all regions. Despite these headwinds we remain committed to our strategic priorities and confident in the long-term potential of our international operations. Now let's take a closer look at our revenue breakdown for the first half of 2025. Our Turkey operations continue to be the backbone admiralship of our business, contributing a solid 72% of our total revenue. The remaining 28% comes from our export and international operations, reflecting our growing footprint beyond domestic borders. When we break this down further by region, we see the following composition. As I said, the Turkey domestic operations account for 72% of total revenue. Our export business contributes 12%, driven by direct shipments from Türkiye. The Middle East region represents 10%, showing resilience despite marketing -- sorry, market challenges. North Africa contributes 3% and Central Asia also accounts for 3% of our total revenue. This regional breakdown highlights the strategic importance of our diversified international presence while reaffirming the strength and consistency of our domestic operations. As we move forward, we remain focused on optimizing our performance across all regions and leveraging growth opportunities in both major and emerging markets. Looking at the market share, Ülker continues to strengthen its leadership position across key categories and geographies. In our home market, Türkiye, we hold our leading 33% share in biscuits, 27% in chocolate and 14% in cakes, underscoring our deep-rooted brand equity and consumer trust. In the Middle East, we remain a strong presence with a 14% market share in biscuits, reflecting our ability to adapt to regional preferences and drive growth through innovation and distribution. Our footprint in North Africa and Central Asia also remains solid with 14% biscuit market share in both regions. These figures sourced from Nielsen's year-to-date June 2025 data highlight our consistent performance and strategic focus on maintaining category leadership while expanding our global reach. Now I leave it to the stage to Fulya, our CFO, for -- to deep dive into our financial performance.

Thank you, Ozgur bey. Good morning, good afternoon, everyone. Thank you for joining our Q2 webcast meeting. Unless noted otherwise, again, I'd like to remind that all the numbers are shown are stated per inflation accounting IAS 29 adjusted figures. So let me start with Q2 results first, Q2 only results first. Volume grew by 5.5% and revenue grew by 11.5%, reaching to TRY 23 million by the end of Q2. Gross profit remained nearly flat, slightly down by 0.6% reaching to TRY 6.3 billion and delivering 27.2% gross profit margin. Slight decrease on the gross profit margin is mainly driven by high input costs and overall EBITDA margin also decreased by 14.9%, reaching to TRY 3.4 billion. We ended up at 14.6% and net income ended up TRY 7.22 million (sic) [ TRY 722 million ]. We delivered mostly for Q2 results, mainly -- mostly in line with what with the market expectation. Input costs, more promotions, sales support activities within the shrinking market also are the main results for the EBITDA decrease. Overall, H1 results -- when we take a look at the H1 results, we see a slight decrease on the volume by 2.6%, reaching to 344,000 tonnes in half 1. This reflects a temporary slowdown in certain international markets, partially offset by stronger domestic market results. Total revenue reached TRY 50.6 billion (sic) [ TRY 51.6 billion ] and which shows a 4.6% growth versus prior year. Gross profit 2.3%, which includes approximately 31% gross profit margin. In terms of EBITDA, we reached TRY 9.2 billion, reaching to 17.8% and net income landed at 6.4% of the net revenue at TRY 3.3 billion by the end of Q2 on a year-to-date basis. Net debt EBITDA is 1.92. But again, I'd like to remind that this is a net debt EBITDA calculation based on the face of the balance sheet. In terms of covenant perspective, which we will show on the coming pages, it's around -- below 1.25. So despite a very challenging environment and market shrank significantly in all of our regions, we maintained top line growth and protected gross profitability. We are definitely working actively on initiatives to strengthen the financial figures on the second half of the year. So when we take a look at the domestic and international breakdown of our Q2 results, we see a very solid revenue growth in domestic market by 10.9% versus prior year, landing at TRY 6.2 billion and also gross profit landing at 26% on a margin basis and which grew by 5.7%. EBITDA margin and GP margin. EBITDA margin, as you can see, landed at 16.1%, and there is a 6.5% decrease versus prior year's quarter. Both EBITDA margin and gross margins were affected by input mainly costs and other cost increases that impacted our domestic market. On international markets, again, we see a solid and strong revenue and top line growth and all of our volumes also increased, especially in Q2 for domestic and international markets. However, with the shrinkage, especially in Middle East and North Africa market, especially on the Middle East market, increased input costs and energy costs impacted our gross profit margins and EBITDA margin. On the next page, we see the category impact by biscuit, chocolate and cake. Let's start with the volume first. So snacking sales volume was up by 6.5%. I mean in terms of category contributions, cake shares remained the same at 10%, whereas chocolate decreased slightly and biscuit increased slightly by 3% each, respectively, in terms of volume contribution. And in terms of revenue contribution, again, cake has steady at 9%. And in terms of revenue contribution, chocolate continues to be a stronger contributor in terms of revenue by contributing 53%, whereas biscuit share is 38%. Again, this performance -- our category performance again highlights the strength of our snacking portfolio and the effectiveness of our innovation and marketing strategies. We will definitely continue to focus on driving growth in high-margin categories and expanding our leadership in biscuit, cake and chocolate. We'd like to give you more color in terms of our international operations and businesses. In North Africa, yes, there is a slight decrease in terms of EBITDA margin versus prior year in terms of -- from 13.1% to 12.1%. When we take a look at North Africa numbers, we see a strong solid top line growth especially in Q2 and year-to-date basis, both in volume and net sales and gross profit margin also remains on a very high level basis as well, but at a slight decrease versus prior year. And this GP percentage decrease around 1% is also reflected to EBITDA margin percentages for North Africa region. For Middle East, sales volume and revenue also grew, not as strong as North Africa because the market shrinkage is quite higher versus North Africa in the Middle East, but lower profitability due to contracted domestic market triggering higher promotional activities, higher brand equity investments and building more brand equity activities, higher raw material costs and increased energy costs put pressure on profit, which we landed at 16.8% as of first half of the year in Middle East region. In Central Asia, as also our CEO, Ozgur bey, mentioned, there is a comeback in Q2, which kind of we were able to recover the losses from Q1 in Q2. And we also had established the Uzbekistan confectionery, which we strongly believe that there is a great potential. And even though it seems there is a decrease versus prior year. However, when we compare the first half and first half for the Central Asia region, we kind of see that the EBITDA margin is stable versus prior year's first half, first half. In terms of balance sheet numbers, let me start with net debt EBITDA. Net debt EBITDA from a covenant perspective is below 1.25. So in the first half of the year, we reached 1.24. Working capital days, average working capital days kind of slightly increased versus June 2024, mainly 2 drivers, inventory phasing and receivables. Again, there is also a phasing impact that we expect to be normalized within the coming quarters. In terms of strengthening our balance sheet activities, our journey continues. We have 66% net position is closed. As of June, $549 million worth of open position is hedged. And as you know, $77 million dividend is distributed to our shareholders on June 19. Again, I'm happy to share with you that today, we officially launched our syndication loan. The original maturity is April 2026. Our syndication official launch is final -- is kicked off today and the leader bank is JPMorgan. Again, I'd like to highlight that great news with you as well. In terms of outlook, I hand over to our CEO.

Okay. Thank you, Fulya. Despite the challenging times, Ülker remains committed to sustainable growth, driven by our strong purpose of ensuring our products are accessible to every consumer. So with that highlight in mind, our 2025 guidance is 3% net sales growth and 17.5% EBITDA margin. So for the year-on-year net sales growth, 3% plus/minus 1% is our guidance. And on EBITDA margin, 17.5% plus/minus 0.5% is our guidance on the EBITDA perspective. And of course, this is powered by our 5H -- 5 happiness growth model, which I shared with you earlier. As we did in Q2, we would like to continue our growth, which is consistent happiness growth driven by volume, competitive happiness growth to maintain and increase our market share, increase our profitable happiness growth, sustainable happiness growth and last but not the least, people-centric happiness growth to bring into life our vision, bringing happiness with every [ bite ] internally for our employees and externally for all our consumers. So I think with that, this brings us to the end of the presentation. Thank you.

In the meantime, we're opening a quick survey for our web participants. Your feedback is highly valued and greatly appreciated. The survey will remain open during the Q&A. [Operator Instructions]. Okay so our first question is from Hanzade Kilickiran from JPMorgan.

I have three questions. The first one is on your -- is about your gross margin. I mean there is a large deviation in the margin in the past few quarters, which is reasonable because of the cost inflation, I presume. But I'm struggling to estimate the upcoming quarters. So how should we think about the trend in the next quarter? Is this going to be similar to Q2 or there could be some sort of improvement starting from Q3 and onwards? The second one is on your working capital, which is a concern on the free cash flow side. And you have highlighted that it will normalize in the coming quarter. And what is driving this normalization? I mean, is this inventory driven or you are cutting the inventory days? What is your working capital or sales target in 2025 based on your current cost contracts? And MENA -- the third one is about MENA. It has been showing weakness more than other markets for a while. I mean what are the main drivers behind this? I presume that your cost base is similar to other markets. So is there a pricing pressure in this market or mix is shifting or there is much higher competition?

Thank you very much for your question. Let me start with the first part of the question. You are asking for gross margin. Actually, what we do is, as I shared with you earlier, in our 5H growth model, we first put the reach to our consumers. So being consistently driving our growth agenda is critical for us. And as you have seen, the context is getting tougher and tougher in 2025. And looking at our -- also the commodity prices are also showing increases. So despite of all these headwinds, what we are trying to do is to manage it really effectively from source to shut to minimize this impact to our consumers. So with that agility and cost discipline, we are trying to -- and we are aiming to manage our profitability in line with our H1 performance. This is what we also expect in H2, answering your question. Moving to the second question about the cash. So I leave it to Fulya to answer.

Yes. Thank you for the question, Hanzade. In terms of working capital, I mentioned phasing of -- in terms of receivables and inventories. For inventories, what happened is most of the inventory of the cocoa, the shipments came out in Q2, so which kind of increased our inventory. But because our consumption will not change in the full year of 2025, we expect it to be phased out based on our production plan in Q3 and Q4. So that's one. And in terms of receivables, we kind of see the -- if you might remember from last year, again, the cash receivables also kind of normalized in Q3 and Q4, so we expect it to be the same again this year as well. It reflects seasonal patterns, sales growth and [indiscernible] temporary transaction. Regarding your -- and we don't -- definitely, we have some targets, but we do not explicitly share a working capital target or some targets that are not public, but you can definitely assume that our first -- I mean, that we have a priority of optimizing our working capital as also shared in the prior quarters with you all. Regarding Q3 Middle East, I hand over to our CEO.

Thank you. Thank you, Fulya. So in Middle East, the lower profitability, what we have seen is mainly due to contracted domestic market demand, triggering higher promotional activities. The slowdown in market is structural and competition is expected to continue aggressive promotions. In addition to domestic contraction, margins have been declined in export markets as well and higher raw material costs and increased energy costs also put pressure on profit margins. In the outlook in the year, we aim to drive our cost efficiencies to a better performance in half 2. So with our discipline, cost discipline powered by our brand campaigns and also successful innovations, which we have a strong pipeline for H2, we aim to drive better profitability in H2 in MENA region.

Our next question is from [ Alper Odamar ] from Garanti BBVA Asset Management. Can you give us some color on the free cash flow for the second half of 2025 and the 2025 estimated net debt-to-EBITDA levels? Can we expect some deleveraging in the second half?

Net debt -- thank you for the question. So net debt EBITDA is around 1.24, so which is below 1.25 in terms of covenant calculations agreed with our finance business partners. So I do not see any deleveraging in terms of -- so we do not -- you should not expect any significant decreases from -- it's already at a very low level as stated as below 1.25. So our objective is to maintain it and to maintain healthy net debt EBITDA levels, maintain healthy and very strong net debt EBITDA levels in terms of having a strong balance sheet. In terms of free cash flow, I have also mentioned on the first question, the phasings on mainly 2 items, receivable and inventory, which we expect to normalize and stabilize over the coming quarters. And as I have shared, anything that's not public, we do not disclose. So we definitely have some free cash flow targets, but we are not disclosing right now. And what you should know is our objective is to optimize both working capital and free cash flow.

[Operator Instructions] Our next question is from Evgeniya Bystrova from Barclays.

I have several questions. So you mentioned during the presentation something on the syndication loan. Is it correct to assume that you've refinanced the 2026 syndication loan with the new facility? And if yes, what is the terms -- what are the terms of the new facility, like maturity, et cetera? And then on my second question for margins, I don't really understand. So in the second half of the year, I mean, your Q2 margins were kind of like very down 14%. And previously, you were also talking about hedges and how that would prevent margin dilution going forward. So just to -- like maybe if you could break down where exactly will we see margin kind of improving from Q2 levels going into Q3, Q4? What would be the main driver for you to achieve your guidance?

Thank you for the -- no, no. Sorry, I think it looks like there is [indiscernible] connection, but now it's over. Related to syndication loan, yes, the objective is there is a syndication loan, which is maturing in April 2026. The objective is this is a syndication loan to refinance the syndication loan. Today, we have launched it. JPMorgan is leading -- is our leader bank, who is leading our syndication loan. The details are not public yet. So -- but I definitely look forward to sharing with you the completion news over the coming quarters. So we are also very excited. I strongly believe that we will be finalizing and completing it very, very successfully like we did our prior syndication and like we completed our Eurobond in 2024. So that's what I can share related to syndication. Regarding margins, I hand over to our CEO,.

Yes. Thanks, Evgeniya for the question. So regarding the margins, actually, there are a couple of factors. First of all, in the markets globally and also in our region, we see a kind of challenging times in the market context in -- across most of the sectors and also in our food sector as well as the snacking sector as well. And you might have seen the news, the public results of the big players which have shown significant decline, some of them on the volumes and also in the profitability as well. So the decline in the margin is due to a couple of things. First, the pressure on the markets, which also resulted in higher promotional activities in the markets. And in terms of protecting our competitiveness, we also balanced our competition activities with our -- together with our margins in order to protect and increase our market share and which we did. Secondly, you have seen the increase in cocoa prices, and we also have seen some phasing of the stock impact of the cocoa, especially, which showed a kind of -- which made some impact on this outcome. Thirdly, there is also seasonality impact of our mix. What we see in the second quarter of the year because of the heat -- because of the temperature, in our portfolio, the biscuit and bakery products are preferred higher than the chocolate products. And as you know, the chocolate has a higher mix impact. And which is also impacted by the ice cream market in the hot summer year as well. But in the year to go, in the normal course of our seasonality, we are expecting to see a positive impact from our mix, and we will see a positive impact from our pricing actions that we have taken as a kind of compound impact. And also because of our procurement strategies and the operational efficiencies that we are creating in the second half of the year, I think this is what we will see as a kind of positive impact in second half. So -- and also, as we have shown in the total outlook, we have already reflected in our numbers some dilution in the margin, which we have seen some of it in the quarter 2.

Okay. Just a follow-up on the syndication. Will that include IFC facility as well? Like do you refinance the whole 2026 debt maturity? And on your covenant, could you please remind you said it's 1.25, right?

Our covenant as of today -- yes, sure. Our covenant as of today is 1.24 below 1.25, so which is a very low and strong number. In terms of syndication, yes, DFIs, both EBRD and IFC are part of our current syndication. Yes, we will also -- we also plan to refinance those amounts as well.

And sorry, on the covenant, the limit for the covenant or the one that -- the level that is tested is 1.25.

Well, I mean, there is no limit on 1.25. 1.25 is a very low number. What I'm sharing is in terms of target, we do not disclose anything. But what we are saying is we want to maintain a very strong and healthy leverage number. But as you know that a healthy net debt EBITDA is around anything below 3 and 3.5.

Our next question is from Yejide Onabule from Barings.

My question was on the covenant has been answered.

The covenant question, which is answered.

Which is covenant. Okay. I already answered. Okay, great.

[Operator Instructions] Our next question is from Gustavo Campos from Jefferies.

Sorry if I missed this. What -- how are you planning to repay the remainder of the '25 bond? Apologies if that was already discussed.

Thank you for the question. So we want to plan to repay the outstanding debt with the refinancing that we plan to finalize like we did in prior syndication and like we did in the prior Eurobonds. I hope that makes sense.

So a hard currency bank loan potentially together with other syndication.

Yes. There is [indiscernible] syndication.

Okay. So it will be separate processes like the term loan that -- the syndicated loan that's from 2026 will have a different refinancing than the existing '25 -- is that correct?

No, that's not correct. So we will -- we currently have a 1 syndication where some commercial banks are part of it and 2 DFIs are part of it, even though we have separate agreements with 2 DFIs, but they are part of the total syndication loan. So what we do -- the original maturity of this loan is -- which we closed in April 2023 is April 2026. What we have kicked off today is with the leadership of JPMorgan to refinance this loan. In fact, that's it to refinance the current syndication loan.

Our next question is from Muharrem Gulsever from Kona Capital Advisors.

I have two questions. First, in respect to the guidance, what inflation figure you plug in for the real growth of [indiscernible]? And the second one is your inventory turnover, if you look at the number on a quarterly basis, it's at all-time high. So should we expect -- even if we should expect normalization, what is the normalized level for you -- given the current macro environment?

Muharrem, thank you for the question. So let me answer the first question and then give the second question to Fulya. The inflation rate assumption we took is 30%. So I hope this answers your question. As of now, it's 35%, but our estimation for the second half is to go a little bit down to 30%, year-end 30% is our estimation.

Second question. Regarding the second question, inventory increase is mainly phasing because most of our shipments came out in Q2, which impacted our Q2 numbers. However, our total procurement number, our production plan has not changed, so which means that our inventory levels will be normalized over the coming quarters until year-end. So you should expect a normalization in terms of inventory levels in Q3 and Q4. Since these numbers, these targets are not public, we do not disclose any specific target in terms of working capital or basing in inventory. So what you can assume that we will definitely try to optimize it as much as we can to make it much more effective. I hope that helps.

[Operator Instructions] Okay. It looks like we have no further questions. I will now hand it back to the Ülker team for the concluding remarks.

So thank you very much for your participation and for your questions. So as a closing remark, what I would say is what I said at the beginning, actually, we are here as Ülker is -- to really bring happiness with everybody to our consumers. This is what we had done in the first half of the year, and this is what we are really striving forward to do in the second half of the year and the upcoming periods, driven by our 5H growth model and strong strategy and operational excellence. Thanks very much for joining, and hopefully, see you next time in the next quarter.

Thank you all.

That concludes the call for today. Thank you, and have a nice day.