9M23 Earnings Announcement

Highlights

Financial Results (mn TL)

9M23

YoY Δ

3Q23

YoY Δ

Revenues

Export Revenues (1)

Domestic Revenues

Operating Profit

EBITDA

EBITDA excluding other income/expense Profit Before Tax

Net Income

225,961

163,637

62,323

29,061

31,145

26,416

23,521

25,094

104%

86%

172%

155%

146%

121%

154%

143%

86,106

61,219

24,887

11,696

12,485

11,253

11,059

13,014

72%

52%

149%

175%

154%

132%

206%

241%

  1. Export revenues and volumes include exports from Ford Otosan and Ford Otosan Romania SRL

Volumes (units)

9M23

YoY Δ

3Q23

YoY Δ

Total Wholesale

456,047

40%

143,254

2%

Export

366,231

35%

112,894

-6%

Domestic

89,816

66%

30,360

52%

Domestic Retail

86,023

58%

29,566

58%

Market Share

9.7%

-0.3 pps

9.5%

-1.3 pps

Production (units) (2)

444,504

37%

134,390

1%

Capacity Utilization Rate

90%

+11 pps

81%

+7 pps

  1. 141,330 units Puma production volumes are included in 9M23. Current generation Courier production ended in July 2023 in Yeniköy
    Plant

In 9M23, total CUR was 90%, reaching 81%, 104% and 100% in the Gölcük, Eskişehir and Craiova Plants respectively.

Summary Income Statement, Million TL

9M23

9M22

YoY Δ

3Q23

3Q22

YoY Δ

Revenues (3)

225,961

110,857

104%

86,106

50,127

72%

Export

163,637

87,962

86%

61,219

40,144

52%

Domestic

62,323

22,895

172%

24,887

9,984

149%

Gross Profit

34,642

14,560

138%

14,697

5,687

158%

Operating Profit

29,061

11,416

155%

11,696

4,247

175%

Net Financial Income/(Expense)

-5,475

-2,136

156%

-573

-635

-10%

Profit Before Tax

23,521

9,271

154%

11,059

3,615

206%

Net Profit (3)

25,094

10,322

143%

13,014

3,816

241%

Other Financial Data

Depreciation and Amortization

2,085

1,251

67%

789

667

18%

EBITDA

31,145

12,667

146%

12,485

4,914

154%

EBITDA excluding other income/expense

26,416

11,973

121%

11,253

4,853

132%

Capital Expenditures

-15,843

-8,126

95%

-7,561

-2,781

172%

  1. In 9M23, Ford Romania SRL contributed TL 49,230,871 thousand to Total Revenues and TL 12,959 thousand to Net Profit

9M23 financial results published in this earnings announcement have been prepared according to the Turkish Financial Reporting Standards (TFRS).

Herkese Açık-Public

Revenues

Turkish automotive market has had a strong performance in 9M23. The market grew by 63% and reached to 889,956 units. Improvements in vehicle availability and purchasing vehicles seen as an investment instrument in an inflationary environment have been effective in this sales pick up. In 9M23, sales increased in all segments (YoY: PC 67%, LCV 62%, MCV 50% and Heavy Trucks 30%) and PC industry share increased to 74.9% (9M22: 73.2%) while LCV&MCV industry share decreased to 21.4% (9M22: 22.2%) in 9M23. Ford Otosan continued to maintain its CV leadership with a 29.7% market share, despite 1) the extended ramp-up period for the Courier and Custom models (the production of the current-gen Courier ended in July, and the new-gen Courier and Custom models will be available in the market in the 4th quarter), and 2) the supply chain challenges at the beginning of the year. As a result, Ford Otosan continued to be #3 in the total industry with 9.7% market share (9M22: 10.0%).

The UK van market grew by 20.8% YoY in 9M23 mainly due to the easiness in supply chain, growing fleet renewal and low base impact. Ford continued to be No.1 brand with our Custom and Transit models. As the largest commercial vehicle manufacturer of Ford in Europe, Ford Otosan has continued to support Ford's market position and profitability in the market. Besides, European passenger car market went up 17.4% YoY in this period and Ford Otosan has contributed to Ford's performance in PC segment with Puma, Ford's best selling car in Europe.

Domestic Revenues increased by 172% YoY and realized as TL 62,323 million in 9M23. 66% YoY increase in sales volumes and ongoing pricing discipline were the main drivers of this performance. Export Revenues reached to TL 163,637 million, up 86% YoY in this period due to 35% YoY volume growth primarily supported by the volumes from Craiova Plant and exchange impact (average EUR/TRY up 42% YoY). Total Revenues increased by 104% YoY to TL 225,961 million and volumes were up 40% YoY. Share of exports in total revenues was 72% in 9M23 (9M22: 79%).

Profitability

Ford Otosan has continued to achieve successful financial results in 9M23. The profitability remained strong as a result of i) strong domestic performance and increasing domestic share in total sales, ii) solid export volumes supported by Romania Plant's units, iii) ongoing pricing discipline, iv) cost reduction measures and OpEx control, v) exchange impact (average EUR/TRY up 42% in 9M23 YoY).

Gross Profit rose 138% YoY to TL 34,642 million supported by increasing share of domestic sales in total sales and strong YoY growth in domestic volumes, ongoing cost reduction actions and pricing discipline. Net Other Income grew by 581% YoY to TL 4,729 million in 9M23, driven by the 443% YoY increase in Net FX Gain from Operating Activities (resulting from the currency impact). In this period, increase in Net Financial Expenses (in other operating income/expenses) slowed down and rose by 32% in 9M23 due to the 98% contraction in 3Q. As a result, Operating Profit increased 155% YoY in 9M23 to TL 29,061 million. EBITDA grew 146% YoY to TL 31,145 million while EBITDA excluding the currency impact was up 121% YoY to TL 26,416 million. EBITDA per vehicle and PBT per vehicle were EUR 2,413 and EUR 2,149 in 9M23 respectively.

Net Financial Expenses reached to TL 5,475 million in 9M23 (in 9M22: TL 2,136 million). The main reasons behind 156% YoY increase in Net Financial Expenses: i) Despite 1.7 million Net Interest Income in 3Q, Net Interest Expenses realized as TL 745 million in 9M23 and ii) Net FX Loss went up 125% YoY and reached to TL 5,180 million (balanced with export business related part of Net FX Gain from Operating Activities as part of our cash flow hedge mechanism). As a result, Profit Before Tax increased 154% YoY to TL 23,521 million. Net Profit was TL 25,094 million, up 143% YoY and higher than PBT due to Tax Income Resulting from Deferred Tax Asset.

Margins: Gross 15.3% (+2.2 pps YoY); EBITDA 13.8% (+2.4 pps YoY); EBITDA excluding other income 11.7% (+0.9 pps YoY); Operating 12.9% (+2.6 pps YoY); and Net 11.1% (+1.8 pps YoY).

Margins

9M23

9M22

YoY Δ, pps

3Q23

3Q22

YoY Δ, pps

Gross Margin

EBITDA Margin

EBITDA Margin (excluding other income) Operating Margin

Net Margin

15.3%

13.8%

11.7%

12.9%

11.1%

13.1%

11.4%

10.8%

10.3%

9.3%

2.2

2.4

0.9

2.6

1.8

17.1%

14.5%

13.1%

13.6%

15.1%

11.3%

9.8%

9.7%

8.5%

7.6%

5.8

4.7

3.4

5.1

7.5

Per Vehicle (EUR)

9M23

9M22

9M21

3Q23

3Q22

3Q21

EBITDA

2,413

2,184

1,997

2,690

1,917

2,026

PBT

2,149

1,691

1,836

2,644

1,428

1,893

Herkese Açık-Public

Sales Performance

Ranking #3 in the total industry in 9M23 with 9.7% share, maintained leadership in total CV with 29.7% share.

Sales Volume by Model, units

9M23

9M22

YoY Δ

3Q23

3Q22

YoY Δ

Domestic Sales

89,816

54,268

66%

30,360

19,945

52%

Puma

3,905

1,055

270%

1,897

345

450%

Other

18,533

4,697

295%

5,999

1,678

258%

Passenger Car

22,438

5,752

290%

7,896

2,023

290%

Courier

36,388

24,271

50%

11,300

8,859

28%

Connect

438

241

82%

184

24

667%

Light Commercial Vehicle

36,826

24,512

50%

11,484

8,883

29%

Transit

16,928

13,963

21%

6,674

5,096

31%

Custom

4,434

3,708

20%

1,240

1,312

-5%

Ranger

829

524

58%

614

223

175%

Medium Commercial Vehicle

22,191

18,195

22%

8,528

6,631

29%

Truck

8,223

5,563

48%

2,452

2,302

7%

Rakun(4)

138

246

-44%

0

106

N/M

Export Sales

366,231

270,998

35%

112,894

120,022

-6%

Custom

101,144

111,350

-9%

30,328

35,963

-16%

Transit

105,703

86,036

23%

34,118

27,014

26%

Courier

17,091

17,835

-4%

2,994

4,669

-36%

Truck

5,446

5,594

-3%

1,926

2,199

-12%

Puma

136,721

39,403

247%

43,437

39,403

10%

Other

126

10,780

N/M

91

10,774

N/M

Total Wholesale Volume

456,047

325,266

40%

143,254

139,967

2%

(4) Rakun production ended in 3Q23

Total Turkish Automotive Industry Sales

889,956

545,652

63%

310,282

172,803

80%

Ford Otosan Retail Sales

86,023

54,320

58%

29,566

18,660

58%

Ford Otosan Market Share

9.7%

10.0%

-0.3 pps

9.5%

10.8%

-1.3 pps

Balance Sheet and Cash Flow

Summary Balance Sheet, Million TL

9/30/2023

12/31/2022

YoY Δ

Current Assets

Current Liabilities

Property, Plant and Equipment - Net

Total Assets

Total Liabilities

Shareholders' Equity

96,935

77,565

32,261

163,199

122,693

40,507

55,125

46,206

20,145

96,052

74,650

21,402

76%

68%

60%

70%

64%

89%

Financial Ratios

9/30/2023

12/31/2022

Current Ratio

1.25

1.19

Liquidity Ratio

0.83

0.81

Net Debt / EBITDA

0.83

1.32

Current Assets / Total Assets

0.59

0.57

Current Liabilities / Total Liabilities

0.63

0.62

Total Liabilities/Total Liabilities & Equity

0.75

0.78

Return on Equity

82.6%

87.0%

Summary Cash Flow Statement, Million TL

9/30/2023

9/30/2022

YoY Δ

Beginning Balance of Cash & Equivalents

10,110

14,106

-28%

Net Cash from Operating Activities

33,887

7,914

328%

Net Cash Used in Investing Activities

-15,830

-14,933

6%

Net Cash Used in Financing Activities

2,527

-28

N/M

End of Period Balance of Cash&Equivalents

30,468

7,249

320%

Herkese Açık-Public

2023 Guidance

2022A

1st Guidance for 2023

2nd Guidance for 2023

Last Guidance for 2023 (5)

Total Industry Volume

822 K

800 K- 850 K

1,000 K- 1,100 K

1,100 K- 1,200 K

Ford Otosan:

Retail Sales Volume

85 K

90 K- 100 K

110 K- 120 K

110 K- 120 K

Export Volume

391 K

550 K - 570 K

550 K - 570 K

530 K - 550 K

Turkey

298 K

355 K- 365 K

355 K- 365 K

335 K- 345 K

Romania

93 K

195 K - 205 K

195 K - 205 K

195 K - 205 K

Wholesale Volume

476 K

640 K - 670 K

660 K - 690 K

640 K - 670 K

Total Production Volume

466 K

630 K - 660 K

630 K - 660 K

610 K - 640 K

Turkey

374 K

430 K- 450 K

430 K- 450 K

410 K- 430 K

Romania

92 K

200 K- 210 K

200 K- 210 K

200 K- 210 K

Capex (fixed assets)

€ 818 mn

€ 1,000-1,050 mn

€ 1,000-1,050 mn

€ 900-950 mn

General Investments

€ 52 mn

€ 90-100 mn

€ 90-100 mn

€ 90-100 mn

Product Related Investments

€ 766 mn

€ 910-950 mn

€ 910-950 mn

€ 810-850 mn

  1. Total industry volume guidance is updated as a result of the strong demand outlook in the domestic market for the full year.

Export and production volumes are reduced due to the longer than expected ramp-up period for the next-gen Courier and Custom models.

CAPEX guidance is slightly decreased due to the budget calendar shifts for the new projects.

Contacts

Gül Ertuğ

Bahar Efeoğlu Ağar

Chief Financial Officer

Head of Investor Relations

Tel: +90 262 315 69 05

Tel: +90 216 564 7859

gertug@ford.com.tr

bagar@ford.com.tr

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Disclaimer

Ford Otomotiv Sanayi AS published this content on 25 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2023 16:24:43 UTC.