2025-06-13-花旗集团-阿奇立克公司（ARCLK）_阿奇立克公司（ARCLK.IS）_预期利润率和需求将逐步复苏；评级上调至买入_高风险_20页_787kb

Arcelik AS (ARCLK.IS) Summary

Core Content and Main Points

Arcelik AS has been upgraded to Buy/High Risk by Citigroup Research, with a positive catalyst watch and an unchanged target price of TL170, implying a 54.1% expected share price return. The current share price is at TL110.30, reflecting a ~30% decline in USD terms year-to-date (YTD) and a ~45% drop in LTM terms, suggesting the stock is at its 5-year lows in USD.

The report highlights that Arcelik's EBITDA margins and consumer demand are expected to start recovering in the next 12 months, after bottoming out in FY24/1Q25. This recovery is supported by cost optimization in its European business, stronger EUR vs. USD exchange rate, and lower raw material costs. The company is well-positioned to meet its 2025 EBITDA margin guidance of 6.5%, up 1.2 percentage points YoY.

Arcelik's domestic demand in Turkey is anticipated to improve due to rate cuts and an easier base, with real sales expected to turn positive in the second half of 2025. In Europe, the company's key market contributing ~50% of sales, demand has shown signs of recovery since 2H24, with further support expected from rate cuts and cost-cutting initiatives.

Key Financial Highlights

Key Drivers of Recovery

• Currency Favorability: A stronger EUR vs. USD is expected to benefit Arcelik's margins, as ~40% of its costs are in USD. A ~1pp change in the EUR/USD rate could result in an ~EUR10-12mn uplift in EBIT.
• Cost Optimization: In Europe, Arcelik has already achieved ~EUR25mn in synergies in 1Q25, with ~EUR140mn in total cost savings expected over 3 years.
• Rate Cuts: Expected rate cuts in Turkey and the EU should support domestic demand and real sales in the second half of 2025, leading to flat real sales in 2025 and mid-single-digit growth in 2026.
• Margin Recovery: EBITDA margin is expected to rise to ~6% in 2Q25e and reach ~6.5% by year-end 2025, in line with guidance.

Leverage and Financial Health

• Arcelik's leverage has peaked at ~5x in 1Q25 and is expected to normalize to <4x by FY25 year-end, with ~3.7x by year-end 2025.
• The company's leverage is currently ~105.9x (Net Debt to Equity) in 2025, and ~38.8x in 2027, reflecting improved financial flexibility.
• Arcelik's free cash flow (FCF) is expected to improve significantly in 2025e, with ~TL6,695mn in FCF, and further gains in 2026e.

Valuation and Estimates

• The company's EV/EBITDA multiple remains at 5x, in line with the 5-year average.
• 2025e/2026e EBITDA estimates have declined by 13% /8%, due to IAS29 accounting adjustments, but the target price remains unchanged at TL170.
• Sell-side consensus target price is at ~TL175, with 43% of analysts Buy-rated and 57% hold-rated.
• Arcelik's P/E ratio is expected to improve from 15.1x in 2025e to 7.6x in 2027e.

Key Risks

• Macro Volatility: A slower rate cut path could lead to a weaker recovery in discretionary demand.
• Consumer Sentiment: Deterioration in consumer sentiment may result in lower volumes and reduced capacity utilization.
• M&A Integration: Challenges in integrating the acquired assets from Whirlpool could impact synergy realization.
• Competition: Increased competition from Chinese producers (who may re-route goods to Europe due to US tariffs) could put pressure on pricing.

Conclusion

Arcelik AS is currently at an attractive entry point, with the potential for margin recovery and demand improvement in both Turkey and Europe. The upgrade to Buy/High Risk is based on the expectation of stronger margins, improved FCF, and normalization of leverage. However, the company remains exposed to macroeconomic risks, competitive pressures, and challenges in M&A integration.