Arcelik A.S. (BIST:ARCLK) Q3 2021 Earnings Call

0:00 Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your course call operator. Welcome and thank you for joining the ArchEli conference call and live webcast to present and discuss the third quarter 2021 financial results. At this time, I would like to turn the conference over to Mr. Polat Sen, Chief Financial Officer, Mr. Oskar Simen, Finance and Enterprise Risk Director, and Mr. Alper Gur, Investor Relations and Capital Markets Compliance Manager. Mr. Sen, you may now proceed.

0:31 Thank you very much. Good afternoon, ladies and gentlemen. Welcome to our third quarter 2021 results webcast. Before going into the details, I'd like to take the opportunity to thank all of our employees for their dedication and hard work during this year. I'll start with the slide two. Let me give you the highlights of the third quarter. Our consolidated next sales was 18.1 billion Turkish Liras in this challenging quarter, registering 52% year-on-year and 25% quarter-on-quarter growth, while the growth was 29% year-on-year and 6% quarter-on-quarter organically.

1:16 As expected, as the demand across regions started to normalize within the quarter and raw material costs continued to increase, despite falling demand and cost inflation, We have been able to post better EBITDA margin of 10.4% compared to the previous quarter on comparable basis, excluding the impact of acquired operations of Hitachi and Whirlpool Manita factory. On a consolidated basis, including the impact of our recent acquisitions, EBITDA margin has stayed flat at 9.8%. The resilient profitability was a result of operational efficiency, the price increases in the market, and the positive mix impact.

2:03 Our OPEX to sales ratio in third quarter came down by 194 basis points to 21.2% compared to the last quarter. On comparable basis, The ratio was down by 90 basis points to 22.1%. Enjoying the positive impact of acquisitions and improvement in net working capital items, our net working capital to sales ratio was decreased to 26.1% from 26.8% in the second quarter of the year. As of July, we have started to buy back our shares since we do not believe that Arcteryx market capitalization does not reflect its actual operating performance.

2:53 As of September end, we have acquired 26.6 million shares in total, corresponding to 3.9% of the equity with weighted average price of 32.12 Turkish Liras. Our leverage was two times in this quarter, including the share buyback impact of 0.12 times, still around the safe zone. Our recent acquisitions is included in the leverage calculation with three months operations. Therefore, the leverage is negatively impacted. With an annualized EBITDA contribution of our recent acquisitions, the leverage would also be positively impacted Again, 0.12 times as well. So you will see two times, but a comparable basis, it is 0.12 and 0.12, totally 0.24 times less than that.

3:53 Let's move on to the other slide. Our revenue on a consolidated basis has increased 52% as I have just explained to 18.1 billion TL in the third quarter of the year thanks to the additional units mainly from recent acquisitions and price increases and strong EURUSD against TL. The growth was 29% year-on-year life-for-life basis. As I was mentioning, The raw material costs continued to increase in this quarter as well. In addition to lower capacity utilization, strong US dollar and Euro and relatively lower profitability of our recent acquisitions resulted around 200 basis points contraction in gross profit margin on a quarterly basis.

4:46 Life for life basis again. Our gross margin was 29.8%, reflecting the limited contraction compared to Q2 2021. Within the period of July to September, we saw an increasing trend in gross margin, and particularly in September, our margin was above 30%. On the right-hand side, you can see our EBITDA margin. The operational efficiencies that we have created in this quarter helped us to deliver 10.4% EBITDA margin, 62 basis points higher compared to the second quarter, again, on life-for-life basis.

5:34 On a consolidated basis, including the impact of recent acquisitions, the margin was 9.8, which is flattish to second quarter, as the dilutive impact of acquirees were not as high as Arçelik. I'll move on with the domestic market. In the third quarter 21, Turkish MDA 6 market was down by 11% in unit terms, as it was expected due to the strong base of the last year. Our performance was slightly better than the market, yet we posted 9% contraction in unit terms on a yearly basis.

6:20 Besides cycling its strong growth a year ago, consumer appetite was not high due to the inflationary macroeconomic environment and natural disasters experienced in our country. On accumulated basis, Turkish MDA6 market was up by 12% in 9 months 21, while Archelix volume has increased by 18% on a yearly basis. Thus, we have maintained our strong leadership position in the Turkish market. AC market grew by 25% year on year on third quarter and our AC sales have increased by 18%. TV market continued to shrink after second quarter as well.

7:10 I'll move on to the European market. In Western Europe, we saw contraction at varying degrees in almost all the countries in both July and August, mainly due to the high base of last year. We have seen the highest contraction in UK. as countries still having supply chain disruptions and driver shortages, which causes lag in delivery. In Eastern Europe, Ukraine, Romania, Poland, and Russia continued to grow, yet the growth was decelerated compared to the previous quarter. The share of European markets, I'm moving to the other slide, the share of European markets in our total sales was 43% in third quarter of 21, of which 30% was coming from Western Europe and 13% was coming from Eastern Europe.

8:07 As demand was weakening in Western European markets, Archelik took benefit of having acquiring Whirlpool Manisa factory. The additional units provided by that acquisition, together with the price increases, led revenue to be increased by 20% quarter-on-quarter and 25% year-on-year in Euro terms. With strong third-quarter performance, Beko has strengthened its market leadership position in the UK as of 9 months 21 results, while Archelik Group was gaining slight market share in France, Spain and Italy. In the Eastern Europe, Archelik benefited from relatively good demand and increased its top line by a high percentage on a quarterly basis. With Beko and Arctic brands, Archelik Group maintained its strong leadership position in Romania in this quarter as well.

9:10 Our price index in Russia has been increased in July and August, while we were able to gain slight market share in Ukraine with improved price index. When we look at Africa and APAC, cycling a quite strong base with lower units sold, South Africa revenue was contracted by mid to high single digit percentage in third quarter on a yearly basis in Euro terms. On a quarterly basis, Despite the looting issues in the country, DeFi was able to increase its sold both in domestic and export markets and also increase its top line by double digits.

9:55 Just like in most of our operating geographies, our strong leadership was maintained in South Africa as well by even gaining market share in the first nine months of 21. In line with our strategy, APEC sales is now getting more share in our total sales with Archini-Kitachi contribution. Archini-Kitachi shares in total, APEC region sales was 60%, while its share was 11% on a consolidated basis. Despite the fourth wave of COVID-19, and continued inflationary environment, our sales in Pakistan was 25% higher in both PKR and Euro terms on a yearly basis, thanks to the continued high demand and price increases.

10:49 Having been impacted mainly by the government-imposed restrictions, our sales in Bangladesh contracted by 26% on a yearly basis in Bangladesh Taka terms. When we look at the raw materials, in this quarter, average metal price index was flat compared to the previous quarter at copper, aluminum, and electric sheet metal price negatively impacted from electric crisis that we are facing with. On the contrary, average plastic prices came down from third quarter from historic high levels compared to the last quarter. mainly due to the supply surplus normalization period and ease force majeures.

11:35 We now see that the average raw material prices in fourth quarter are parallel with third quarter and expected to be parallel in first quarter as well in 2022. Yet this energy crisis that the world has been facing so far is going to have a negative impact on some of the raw material prices. Going forward, although the uncertainties are still there, we expect the average raw material prices to be lower in 2022 compared to 2021. So I'm going to leave the stage to Özkan to move on from here.

12:17 Thank you. I will continue with the sales breakdown. In Q3, Turkey's sales grew by 31.6% year-on-year organically. On the other side, our international sales grew by 62.7%, of which 4.4% was organic growth, 22.6% is ethics impact, 35.6%, which is actually 2.8 billion TL, is coming from the acquisitions. We are benefiting from diversified operating geographies. On the right-hand side, you can see our regional revenue breakdown. The share of Turkey in total sales has gone down by 4.5% compared to the same period of last year, and by 0.3% on quarterly basis, as our recent acquisitions enhanced our diversification.

13:13 I will continue with the financials. Here you can see our detailed financials. Those figures include the impact of our acquisitions. As mentioned in the highlights section, thanks to the contribution of recent acquisitions and price increases, we have strong revenue growth of 52% on a yearly basis and 25% on a quarterly basis. Excluding the contribution of acquisitions, yearly growth was 29% while quarterly growth was 6%. With the revenue of 18 billion TL in Q3, we have reached 45.6 billion TL in year-to-date figures. Our consolidated growth margin was 28.2% in Q3, reflecting the further increases in the raw materials and the dilutive impact of the acquisitions. On a comparable basis, growth margin was 29.8%.

14:10 Despite lower gross margin in Q3 compared to the previous quarter, we have been able to sustain our EBITDA margin as 9.8% through operational efficiency. Without the impact of acquisitions, we have delivered EBITDA margin of 10.4%. EBITDA of 1.8 billion TL is almost the same as last quarter. In new today's figures, we have reached 11.2% EBITDA margin, which is in line with our guidance. Thanks to the strong operational profitability, our consolidated net income was 716 million TL in Q3, which is higher than last quarter. And our net profit margin is 3.8, 3.9% on a consolidated basis, while sluttish on a comparable basis. In year-to-date figures, net profit is 5.1 billion TL, which is 5.2% of revenue and almost 50% higher than last year.

15:13 I will continue with the net debt slide. Our leverage was two times in the third quarter, stays flat compared to the last quarter. We have been able to manage to sustain the ratio at quite healthy levels, despite cash outs of the acquisitions, and having a bit of contribution only for one quarter, and cash outs of payback. When the value of the shares acquired by the end of September is added to the net debt calculation, the leverage will be 1.83. And if we consider the annualization impact of EBITDA, it will be 1.76 times. On the right-hand side, you can see our loan and bond portfolio with 21 billion Turkish Lira equivalent, where 35% of the portfolio is Turkish Lira loan and bonds.

16:11 As you know, we are financing our Turkish business working capital needs in Turkish Lira loans, starting from the first quarter of this year. As the market rates have gone up, our effective interest rates have been higher. But as of September, the effective rate for the loan of Turkish Lira is 17.2%, still lower than the average market borrowing rate. We have been our 350 million Euro bond in September. Therefore, our growth steps decreased compared to the second quarter. Next slide, you will see breakdown of working capital, capex, and free cash flow. In this strong quarter, we have generated positive free cash flow of 43 million Turkish lira. Networking capital-to-faith ratio has improved from 26.8% to 26.1%.

17:13 Together with an improved networking capital-to-faith and flourished capex-to-faith ratio, helped us to post positive free cash flow. On cumulative basis, as of September, our free cash flow was negative at 3 billion Turkish Lira. However, in the coming quarter, we expect to create better free cash flow compared to the previous quarter. Now I will leave the floor to Polat for the guidance.

17:42 Thank you very much, Özkan. We have decided to make slight adjustments to our revenue guidance compared to the second quarter while keeping all other items the same. Based on our most recent forecast, we increased our Turkey sales growth expectation from 30% to 35% and our consolidated sales growth expectation from 50% to 55%. Please kindly be informed that almost half of our 35% international sales growth guidance is the revenue contribution of our recent acquisitions. As we are getting closer to the year end, we are quite confident to achieve our guidance in all lines. Thank you very much for listening to us.

18:31 We are expecting your questions. The first question is from the land of Lanka Sachang with Bank of America. Please go ahead. Yes, thank you. Good afternoon and good evening, everyone. And thank you for the opportunity to ask a question. So my question is related to the raw material prices, especially in the plastics market. I think in the last few weeks, we've seen prices go up pretty significantly due to the Chinese dual control policy that we are seeing. I just wanted to understand how are your raw material contracts right now over this quarter as well as Q1 next year and how should we be looking at the trajectory? I know you said it's going to be flat Q on Q, but just wanted to get a more six-month kind of a view here.

19:22 Thank you. All right. Thank you very much. To be honest, we have been going through a lot of crises this year. First the chipset crisis, then the logistics crisis, now we are facing the energy crisis. And all those are affecting every single raw material item in a different way. So, especially with these energy crises, we are mainly affected with The price pressure from for example aluminium is affected a lot in our industry as they are using a lot of electricity to melt for the smelters. And then also copper is affected.

20:10 That is something that we expect that the electricity prices is going to be affecting and also glass manufacturers are affected that we are using in washing machines and refrigerators and ovens as well. So those are the prices that we expect to be a little bit under pressure in terms of increase. But with the other raw materials like cold roll steel, polystyrene, et cetera, we do not see that high increase in terms of price pressure. So for quarter four I have to talk average to average because as I told you know every single raw material is moving in a different way but in average to average comparison quarter four is going to be very similar to quarter three and we expect the same trend to continue in Q1 as well. So in six months perspective, we do not really expect a huge change in the raw material crisis. That is the expectation and we already are leaving Q4 and we are starting to discuss for Q1 as well.

21:32 So we have some information about it. But after that, starting from Q2, we expect a decrease actually, which is going to make 2022 average raw material prices less than 2021 average raw material prices, all in all. Thank you. Thank you, very clear. The next question is from the line of Demirta Semal with Atta Invest. Please go ahead. Thank you for the presentation. My question is about the contribution of Hitachi and Whirlpool. Could you further elaborate the details? What portion of that was from Hitachi and what portion of that was from Whirlpool?

22:22 And could you give some color for the rest of the year and for the following year from that business? Thank you.

22:33 Cemal Bey, just to understand your question better, which part of P&L or balance sheet you're asking about? Is it the or profitability or where? First, from the revenue side, I see some numbers from the, you know, the food notes, some numbers for, you know, for Hitace around 2 billion something. But I want to understand the revenue contribution in the Third quarter, that's my question. And if you give some, you know, color on the EBITDA side, it's still be all more than welcome. And, you know, for the following quarter, because we were making some estimates based on, you know, some rough estimates, Euro estimates, Euro base, and it's a little bit lower than what I thought.

23:23 So I want to understand, you know, what could be the trend for the following year. Thank you.

23:34 In terms of sales, Hitachi's contribution was around 2 billion, a little bit over 2 billion Turkish Liras. And Manisa factory was around 750, a little bit over 750 million Turkish Liras. So when we look at the EBITDA, As we have tried to explain, without the contributions of those companies, it's 10.4. With the contribution of those companies, it's 9.8. I do not have the numbers with me right now, one by one, but it's obviously clear that Hitachi and Manisa factories are, in terms of EBITDA, it is lower, but in total average, it is 6.8% for the acquisitions EBITDA.

24:36 In the coming months, our expectation from those acquisitions or let's say in the coming year, we are expecting some synergies to kick in. So we expect an upside potential in 2022 for the acquisitions that we have made this year. It's really not easy to say because of these volatile raw material issues that we are living in. But definitely, we have been working in these companies right now for three months, and we see a lot of synergy opportunities, especially in the raw materials and on the supplier side. And also we see a lot of synergies, especially in the APEC region that we can utilize some of our capabilities and their capabilities.

25:34 So I can say that it is going to be higher than this year. Definitely. In, you know, the ethics space, right? US dollar, Euro or Euro based.

25:47 Sorry, I didn't get the question, sorry. Okay, it's, you know, in Euro or US dollar base, you mean, right? What is Euro or US dollar? Not that I told. Yes, yes, yes. You know, the levels, you mean, like, you know, in terms of the size, should be based on the US dollar or just the euro?

26:20 The one that I have explained is 2 billion and 750,000, which is Turkish liras, actually. in total. In euro terms, we are talking about for Hitachi, it's around 200, more than 200 million euros, more or less. And for Manisa, it's around 75 million euros for these three months. Thank you. And as a follow up, I see some minority interest, which is higher in this quarter, around 65 million. What is it related to? When we come to the net income, because we subtract that number, minority, I see higher number, 65 million in third quarter. And I see a higher depreciation, by the way. Could we assume that the depreciation will remain at current levels or should we expect some increase in quarterly depreciation for the following quarters?

27:30 Cemal Bey, the minority impact is actually related to the Hitachi acquisitions because there are some minorities in the sub-stories underneath our JV. So I will provide you more detail after the call for that variance, but it's related to Hitachi.

27:51 The depreciation side actually, the difference could be related to the acquisitions again, but let us check and get back to you on that one as well. We should be, if this is related to the acquisitions, I think we should be expecting this level of depreciation from now on. Okay, because I see around 460 million. Yeah, depreciation for the third quarter and it was 380. So, 8 million higher depreciation. So, that's why I asked. Thank you. Thank you. The next question is from the line of Kilikiran Hanzade with JP Morgan.

28:37 Please go ahead. Thank you, Polat Bey Özkan. I have three questions. The first one is regarding the demand outlook. So how do you see the current market trend both in Turkey and international markets? And maybe, particularly for Turkish market, do you believe that you may be able to pass a fixed impact to retail prices without hurting the demand? And second question is about the cost pressure. I mean, there are many different views around the cost inflation for the industry, actually. And I try to understand what type of scenario do you reflect your cost assumption so that you see a decline on your cost of material costs in the fourth quarter.

29:23 And recently, there was some sort of news regarding the shortage of magnesium, which may impact aluminum. So is this something that could affect your industry. I think China is supplying the magnesium, so there is some sort of shortage there. And the third question is about your EBITDA margin guidance. You are very close to your guidance at the moment. Do you see any sort of risk in the Fort Carter portfolio? Because I think Fort Q is traditionally a lower quarter from a margin perspective. Thank you.

29:58 Great. Thank you. I'll start with the demand outlook. We have just started our budgeting process for 2022, and the understanding for 2022 in terms of demand, both for, let's say, European markets and the Turkish market, looks All right. We are expecting growth in the European market. That is what I can say. But in Turkey, Because of the strong growth and basis of this year, we think that the growth should be limited. I think it should be, in terms of units, it should be around low single digits in Turkey.

30:46 That is our expectation. And in terms of a fixed effect in Turkish markets, yes, we are really trying to adjust our prices. in order to keep our profitability. And is it affecting the demand? Yes, it is. We have started to see that the demand is affected. That's why we are a little bit, let's say, more cautious about giving high growth for next year for the domestic market in terms of units. But in the other markets, we are expecting growth, including Europe, Pakistan, Bangladesh, and South Africa, which are our bigger peace markets.

31:38 And also, we are expecting some growth in APEC region as well, and we are expecting growth in the Hitachi side as well. In terms of cost assumption, you talked about the shortage of magnesium, which is affecting aluminum. Yes, we are constantly, you know, following up any issue that may come up, let me say. But right now, we do not see anything, you know, high alert situation in any of the raw materials that we are using. It is still manageable, and we do not really expect a kind of stoppage in production or something like that in the coming quarters because of those shortages in the market. Because it's not only about aluminum, I have to say.

32:32 We are also experiencing the same in the, for example, electrical steel that we are buying as well. All of them are still manageable, that's what I can say. On the EBITDA margin guidance side, it is important for you to understand that in the second quarter, we had a sharp decline in EBITDA and our gross profitability. April was better, but May and June, it started declining. We stopped the decline in July and August, so it was very flattish to May and June, July and August.

33:18 Especially in September, we have been able to increase our gross profitability again with the measures that we have taken in price, in promotions, in mixes, etc. So right now we have changed the, let's say, the direction of the growth to acceleration. So we are expecting better margins, especially in October. And in November and December, of course, December is a half month, so the margin is going to decrease. We are counting into that. That's why we think that November and October is not going to be harsh as April to August period. So our expectation is fourth quarter to be in line with our expectations, and that's why we didn't change the guidance for the year end on EBITDA.

34:18 Thank you, Polat Bey. It's very clear. Thank you. The next question is a follow-up question from the line of Demirta Semal with ATA Invest. Please go ahead. I have three more questions. The first one is about the financial expense side. I see the numbers for interest expense. We were expecting a little bit higher. I see that there's a normalization in interest expense side. That's my first question for the following years. Assuming, you know, what's your assumptions for the interest rates and the potential impact on you? And, you know, normally I get the numbers from your details. I didn't have that time this time.

35:06 But did you have any ethics gain in this quarter or ethics loss? That's related to all financial and ethics side. The other question is about the competition board investigation. What was it about? And do you make any comment on that for what reason it was? in the agenda and the third question was about the tax side effective tax rate was seven percent in third quarter could we assume this low effective tax to continue for the fourth quarter thank you and for the following year any color thank you all right

35:51 I'll answer the question on competition board investigation and I'll hand over to Özkan to answer the other questions. The competition board investigation is a general investigation that the competition board decided to go and they have, according to their claims, they have made the investigation and send us what they have found and now we are they expected a kind of a Defend from us and are trying to understand what our position is and we are trying to explain We do not think that we are in a position as of today to be able to make a judgment on whether that is going to be an important thing or not but right now we we are thinking that that is something that we should be able to explain to them but it will take time because that is a bureaucratic investigation at the end of today there are some phases that we have to go through and whenever we have enough information or you know something that would really be understand if we understand that there is a impact on our financials We are going to be sharing with the public.

37:23 So I will continue with the interest financial expense side. In Q3, we have a finance expense of around 500 million TL. Actually, this is mainly impacted. Actually, it increased compared to the previous quarter because of the Turkish borrowing in our portfolio has increased. As I mentioned, we had some low rate loans in our portfolio where we need to roll and have high rate interest loans. And the average is around 17%. And most of the interest is fixed rate. So therefore, we do not expect much increase in next year, in the coming year.

38:17 But due to lower rates renewables with higher rates, we expect around 100 basis points increase for the Turkish lira side of our portfolio. Regarding your question of the FX gain and loss, this quarter we have a loss of 57 million Turkish Lira, but in year-to-date figures it's almost zero FX gain or loss, so we don't have any loss in year-to-date figures. Why is it so, if you ask? Because our side of exposure affects the side of our eggs by our sell side. In times where we have long exposure, we announced a fixed gain due to swap differentials.

39:05 This has changed after the acquisition cash-out. So our net U.S. dollar position turned out to be short, and we executed dollar-Turkish dollar buy-side forward build in order to hedge our position. And this shift ended up with a fixed loss due to, again, swap differentials, but this time as a loss in this quarter. And in the coming months, actually, we do not expect a higher loss. It will be close to breakeven because our US dollar position is not high in terms of short. So it will be close to breakeven in the coming quarter.

39:54 For the tax side, as you said, our effective tax rate has come down in last quarter and this quarter as well. The main reason behind it is the R&D incentives that we have in Turkey and also investment incentives, which increases our deferred tax assets. As we are an investing company, our capex is increasing. Therefore, the deferred tax asset in relation to that capex expenditure is also increasing. coming from the Turkey operations effective tax rate impact, we have a lower effective tax rate in Q3. However, we do not expect a further decrease in the coming quarter. It will be close to the average rate in year-to-date figures.

40:52 Thank you. And one last question about the Hitachi sites. When I look at the details, As you mentioned to her you recorded around 2 billion Turkish Lira revenue from Hitachi and the net income impact was around 122 million Turkish Lira as I see from these figures and I see that the net margin of Hitachi was around six percent in second quarter in third quarter and two years it was 7.8 in that Hitachi And the EBITDA should be lower, but I understand that there are some other contributions from the HIT-HACHI side, which has higher, maybe you have higher net margin in that business.

41:45 Could you give some indication about that for the following quarters? It's a more detailed question, maybe. But I see that the net margin is higher for that Hitachi site.

42:02 Let me give you clear it, Cemal Bey. Hitachi is a net cash positive company, so they do not have any financial expenses, rather they have financial income. So, working capital is positive there and also the net cash position is positive there. That is the main reason actually why EBIT, between the EBIT, the EBIT margin is around, as you said, It's around 6.2% and the profit after tax is around 6.4%. So it's more or less the same because there's no financial expense, basically. Okay. Okay. Thank you. Thank you very much. The next question is a follow-up question from the land of Lanka Shashank with Bank of America. Please go ahead.

42:55 Yes, thank you. Sorry if you already covered this, but I just wanted to understand what's driving the guidance increase for Turkey revenues. Is it being driven by volumes or is this more pricing driven?

43:11 It's mainly price increases that we have because of the Turkish rate depreciation. We had to adjust the prices and that is affecting the last quarter three and quarter four revenue to be higher. So that's why we needed to re-guide the Turkish domestic market increase in sales. Thank you. We do have a follow-up question from the line of Demirta Semal with Atta Invest. Please go ahead. Lately, I see more commercials related to some campaigns just organized by Alcilik and Beko in local media.

44:04 Are they also normal within the plans or You know, do we see, are we seeing additional promotion activities in the fourth quarter? Thank you.

44:20 Promotional activities and advertising campaigns, we always do, as you know, we are one of the most active companies in the market. I do not really, we do not have any specific strategy to increase our advertisement spending. in the last quarter but of course in order to you know increase especially increase the mix etc they are making some campaigns accordingly and they are trying to make people hear about that But I don't think that it is a it's a negligible increase if there is an increase that I'm not aware of any study Specific strategy on increasing the advertisement in Turkey Thank you We have a follow-up question from the line of Kilikira hands either with JP Morgan, please go ahead Polat Bey, I have a question about your share by rate program.

45:26 You already get to around 5% of the capital now, I think, according to my calculation. So what is the room here? Will we continue on this or it's now almost completed?

45:42 Yes, we are close to 5%, not yet there. We think that still the Archelik valuation as of today is a company who is making almost 75% of its sales S Unsp-Adr S Unsp-Adr S Unsp-Adr S Unsp-Adr And that's why we will keep on continuing the program. As you know, we have announced that we are going to buy up to 10%. And as long as we see this situation, we are going to keep on buying or realizing our share buyback program.

46:38 That is the intention. Thank you. Ladies and gentlemen, there are no further audio questions nor any webcast questions at this time. I will now pass the floor to Mr. Sen for any closing comments. Thank you.

46:55 I would like to thank everyone who has participated in the call at this late time in Turkey. Thank you very much. If you have any further questions, please contact our investor relations department so that we can help you understand the numbers better. Thanks. Good evening.