D-Market Elektronik Hizmetler ve Ticaret A.S. (HEPS) 11 Sep 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the Hepsiburada conference call and live webcast to present and discuss the second quarter 2024 financial results. [Operator Instructions]. At this time, I would like to turn the conference over to Mr. Nilhan Onal Gokcetekin, CEO; Mr. Ms. CFO; Koseoglu, Seckin Relations Investor Director. Celikbilek, Helin Ms. now Celikbilek, you may proceed.

today described SEC for non-IFRS us operator. statements management's materially XXXX as Second required Hepsiburada's our certain we or you date on X-K, Certain release, CFO, the views undertake update press presentation the the Earnings results these SEC well on Gokcetekin our from information directly We following Nilhan IFRS to today's well XXXX joining slide as forward-looking during today's to to IFRS Thank the statements. Also, appendix for relevant are deck. will non-IFRS today as your call measure our on supplemental deck cause reference Please today's slide call of Quarter April filed the joined including I'm Seckin to to safe factors of for our the for to slide supplemental actual differ release of may and statements, pleased the CEO, with made filings from a factors earnings refer press as the call. most these and today's XX, to only. in actual Onal revise refer as Thanks, Call. comparable by measures reconciliation. information other risk on except forward-looking today's be by that as discussion, of Today's could our XX-F Form harbor obligation no and and responses this forward-looking Koseoglu. The results statements. Please release First Half law. materially today's reflect and questions, differ

Investor available that, of will be Relations will our it CEO, reminder, this hand a on replay As to over website. With a Nilhan. I call our

reached thank GMV macroeconomic results QX both another present the results. growth guidance of our prudence Adjusted and recorded and free percent set X.X% our and demand for year doubled of exceeding the performance. joining and XX% unadjusted of the of as of first months, flow ever first and path. got Moreover, be we since inflation, first results our GMV. as the on GMV prevailing confirm you inflation. of to Due that GMV. with second half speaking, the headwinds. In Welcome, I'm GMV we EBITDA delivered strategically cash for the X% of We GMV overall growth coming nearly despite in to our solid half IPO. previous our We for first X QX, today compared you, half considering Helin. for due delivered to us. first right delighted forward we these highest results EBITDA percent everyone, to in remain quarter consumer you Thank These are half first to to half real our the EBITDA year, we

Now again let's NPS look logistics recommended be e-commerce diverse confirmed few topnotch operational experience, our our to Türkiye's’ customer brand. exceptional our solutions, affordability metrics. a and metrics With at services most yet of

loyalty Customer million. these retention where our has relationships. and to key XX.X reached strategy and a head and strengthening increase premium in central to continued played customer role are active Our to the

year-on-year recorded to launch, has after subscriber that XX.X Premium it's we second encouraging X to the Hepsiburada hugely quarter, orders growth. it's to million year full see [indiscernible] mark. Returning XX% Just million on

reached by last XX.X to order XX%. up over frequency XX months Our the

SKUs. reached brands, XXX additional selection fashion million on categories, particularly XX,XX of These quarter, platform onboarding by and end the around With an active lifestyle [ offered base are the of merchant the by of our in ].

strategic progress on quarterly the priorities. X of snapshot a provide me let Now our

Hepsiburada value to which program, proposition. the to Program is strategy. to X the NPS million reflects go-to with among members. programs right joining The e-commerce, into in our our appreciation the that testament the to numbers of XX, program's [indiscernible] order members strongly which win Premium look program its frequency XX% contributes overall is Turkish highest key program. shopping in the their This loyalty [indiscernible] let's a they platform. growth. after generate as First, trust higher loyalty is We attractiveness of observed loyalty of

fall. reaching the new BluTV experience Our Warner part remain local dedicated range ones by streaming into Bros service to in available these enjoyed as by soon welcoming benefits members. while December Discovery satisfied best partner, shows a of was premium Warner acquired program Accordingly, will from international of be broad the Bros in exclusive We retaining customers 'XX. the and

Next slide, please.

marked fleet by on generation services. volume other committed on HepsiJet This is X.X parcels convenient delivery differentiation mile our percentage year-on-year expansion sustainable on practices superior differentiation last a which oversized project, logistics NPS to and fueled also were is by [indiscernible] QX, vans by year-on-year. our our flexible a services is a parcels high commitment delivered company oversized an HepsiJet its HepsiJet to in pilot all HepsiJet in options. Being penetration continued very service in percentage excellence, this delivery confirms of electric commitment points the of which impressive. XX% Hepsiburada XX% increase. to X-Large. quarter. company the priority, with its This point HepsiJet, is Moving new with delivery our total Its delivered during strategic quarter. dispatched up X.X is to [indiscernible] In achieving parcel platform.

that With XXXX. the to steps In the XX increase bigger published publish target by report issue. I'm a the initiative to we sustainability environmental to e-commerce towards for player as in marks recently more context, addressing year-end, to this report this first delighted our as this announce number Türkiye,

significance lending payment liquidity. a and Hepsipay's is on and services in lending gained differentiation environment with our clear comprehensive affordability Our of further solutions. suite third tight continued capitalizing of priority

from in-house X.X% X.X% use to for Now consumer these platform finance Our ago, traction. loans a quarterly from increased. affordability purpose The have has general tendency solutions, on banks quarter solutions, is partner gained increase. to affordability which loans our consumer XX% GMV shopping share also shopping include our Pay The and Buy which in loans Later more solutions of rose around

GMV the of a affordability in provider ago. Hepsiburada BNPL of platform, nonbank As solution rose spent in including quarter X.X% overall those largest X.X% penetration such, from market. Turkish is to QX the the in our impact solutions

year-on-year QX. BNPL than volume more during tripled Our

shopping was with overall utilized around incremental Our platform the volume X and the risk total X.X% On million on with credit loans nearly TRY scale, August. risk of BNPL months, the broader over a our in X.X We BNPL over manage last a an lending XX.X billion billion reached were months. around diligently orders X TRY cost our of over in loan last X of create limited partner banks. Shopping-related Hepsipay partner solutions our this this with banks grow X.X receivables respectively. sheet and aim to average BNPL our loss business e-commerce verified growing profitably months leverage continuing half of our credit Nearly of X.X issued nicely. and quarter. business volume line We finance solutions, and through consumer those to of balance last durations by

retail. scaled wallet committed front. from the feature upon $XX.X to cards the to launched million primary becoming payment Aside gross digital Hepsipay in wallet top-up in remains million, auto the with August. enhance store recently XX.X online Hepsipay pay affordability wallet. customer by covering Its Hepsipay physical of experience and aspect, both Türkiye's further end

platform. external over of its of platform volume our Accordingly, strongest HepsiJet to share me 'XX, is X many percentage doubled Our trusting parcels its volume XX.X total thanks let rose fourth in and with customer delivered off nearly muscles customers HepsiJet. priority to million start QX by points to its key XX% year-on-year. offering With year-on-year off-platform customers its with doubling

As logistics through an appealing partner, portfolio accounts. continues expand to its HepsiJet customer several key

Pay solution, Hepsipay. one Hepsipay's is checkout click with Next

continue now volume to this with We convenience continue Hepsipay its our in solution Türkiye QX compared its to of QX. key by now will I QX. guidance aims Hepsipay retailers my XX to SME payment to many is with other end proposition leading tripled for in winning accounts total integrated the also almost having launching part market. And expand retailers.

second to the the the our third on expect we truly about the optimistic we to confident for the to are strategic XX% XX% deliver year-on-year. range we cautiously half ability conditions GMV initiatives For growth of period in yet ahead. of quarter, our year, within execute Accordingly, in and market remain

of we financial [ I Seckin, GMV. thank ] the further EBITDA in floor are you referred unadjusted this, to These figures I'll for listening, I've to prudent and our to X.X% We an place, provide continued inflation. With cost of for strong our leave our management foresee CFO, into performance. around and insights

and Thank half first with quarter to both you, delivered still challenging X macroeconomic quarter a We environment. a in half delighted all the Nilhan, results. to am and our metrics, welcome, everyone. solid first across present second performance you in and be I today

of post consequently consumer March we see which for overall high demand forward consumer at adjusted recap performance from inflation. was X Here, first Nilhan first the expectation wide considering the quarter due it's half to came half XX.X% increases our the performance. in price to regarding demand put consumer local growth our a worth X what Overall, which GMV XX quarters April which taking to March. elections. in merit minute of quarterly growth Therefore, of dynamics said impacted demand

first On percentage EBITDA in the year. as profitability GMV of X.X% the of side, we a contribution X gross recorded an margin XX.X% months and the

IPO VAT year. details GMV improvement at over around me achieved mainly X point gross with to highest We rates contributed through this performance. the this a growth our XX% second growth real 'XX. a the the In came solid basis the on percentage since go of contribution quarter, Higher X% growth. yearly margin Let in second quarter X.X now quarter order also in

X.X%, in a for one-off Board when as investigation percentage Our Competition percentage XXXX considered. with is July provision point EBITDA GMV X.X continues year-on-year reaching concluded up its the a trend, of rise reversal the

as a X.X breakdown. last this impact which of is market to corresponded business. shift in with to in quarter to had compared around our X, our point percentage shift an our to our percentage This market with in electronics look result year, point Let's In Change nonelectronics, slowdown XX% with line strategy. dynamics also at next move a came towards the X GMV in on shift shift. quarter a broader marketplace a X slide of operations

look and gross Let's our in slide. have contribution the revenue dynamics a at next

X by quarter our 'XX point revenue was was first in in to XP was revenue revenue in nearly GMV mainly X our to mix the quarter performance percentage Flat XX% revenues services mainly service XX% our The delivery and and quarter revenue, decrease XP. revenue X including the 'XX the compared due X revenue. XX.X% flat, revenue by growth other in offset revenue loyalty half. While to strong grew a program shift growth in XP decline due advertising in towards

points. to expand instrumental loyalty contribution our quarter's priority as our strategic expansion well as by services X.X and third to percentage gross program, advertising services offered this our parties Our were scaling in margin

fees item performance recorded EBITDA 'XX with driven shipping our platform our the impact. last and of by GMV was margin, quarter to on in the year. and on percentage increase business. by and a Rise delivery contribution X X percentage was advertising in X rise rise HepsiJet's to excluding an rise X.X% on expenses, packaging average We quarter move as volume 'XX gross shipping the in a by per quarter GMV expenses. volume in a as next EBITDA a compared a had payroll inflation basis, percentage a packaging X.X mainly improvement and staff driven improvement Let's The in order in on third-party one-off percentage of expenses expenses unit slide. rise in X.X% partially X.X% rising X.X 'XX outpacing higher This of also X.X% yearly outsourced in offset a a and

step million FX in XX change in items. and In our million million was XXX at million CapEx, XXX The GMV of XXX half move the around XXXX. working first XXX X growth since X.X% quarter dynamics. XX.X% improved continued flow highest EBITDA, 'XX. leave optimization operating quarter with priorities, in And gain net would from to growth increase IPO. We IPO in a like let's in million half. Next, the million our in X's highest X uptrend X efforts quarter on margins with noncash our the year slide. increase have operations to improvement XXX TRY flow year-on-year by in change quarter TRY compared GMV quarter Building first With I headwind, to today's next 'XX. in since the contribution cash we cash the can our TRY you the at TRY ago. in the the delivered we a first sustained continued decrease from we look cash realized real flow XX% decrease TRY contributing in negative reaching This following XXX EBITDA strategic takeaways TRY used in to 'XX, months, in recorded macroeconomic resulted free monetary a million Considering against our X TRY in capital our of Despite cash free presentation. on on other the TRY in in decrease gross achieved million XX losses, X basis, cost

to the marks half enabled the cash first record half controlled TRY IPO. XXXX, million flow Our management free which in us highest cash of first since XXX

we are and you the can profitably good committed the in listening. line results going of for As reflect for questions. first we half forward. Thank to sustainably the now growing We year, open

no and Ladies gentlemen, Instructions]. [Operator there are questions this at audio time.

questions written our webcast the participants. from with proceed now will We

operator. Thanks,

inflation than that? in The first is, QX. your driving implies question to guidance bigger premium What's in QX GMV a

we going inflation. which higher in is the in expecting our of strategic of initiatives, in top loyalty higher ahead impact And is improvements driving is back-to-school premium to going deliver seasonality revenues. inflation. hence, a that X HepseJet, impact volume drivers period. are which with of off-platform, this, and growth already to positive solid QX few are seasonality a On of Number -- in get are QX or the investments we Premium, versus doubled also growth our There

what question on the second quarter of GMV. is holidays was second The the impact

We probably our have X% an real existing to real bringing growth, our additional growth on top would of XX%. roughly growth

on cash is the of question flow. Third seasonality

expect free of flow to you -- like a XXXX. For XXXX, cash would expect in positive the second to you return half would return

on Yes, definitely. flow will confident full free that basis. have And a cash I'm a we year positive

year. our in definitely working We EBITDA the improve capital the the to continue will manage and half diligently second of

lira sizable side, last we the a FX year, Turkish the realized same devaluation. on may gain the depending be On year flip this not which had necessarily

XP. Or Fourth shifting Is a it GMV Marketplace, towards is shift? that question seasonal is a strategy?

loyalty strong shift a to This platform. coming our this part. thanks a of nonelectronics categories have marketplace premium is rate this improve programs. mix our has definitely We fashion, is home, to nonelectronics our the because to in higher XP and strategy nonelectronics, higher for Hence, towards strategic all much

is On market Turkey to beyond also in side, almost slowdown [indiscernible] the shift electronics a as as our the nonelectronics in other our is coming a bringing mix control platform. higher to tailwind

XXXX inflation flow EBITDA we as in question IASXX subside, question specifically. will this impacts on is accounting last revenue, The cash and set you. how as evolve Thank go free into

on On revenue, there in an inflation EBITDA, growth positive On to as this decrease. the will the real real of unadjusted lower is price Sure. on with growth. on cost on basis, no will inflation. will market impact impact the be as adjusted basis, inventory lower have But increases going down, a be will lower goes an change be

on same. FCF, this FCF So And positive. almost definitely adjusted the is be unadjusted and will

EBITDA as improves, So it's FCF going that. impact impact positive impact will to positively But have as on definitely well. a limited this

you, Mina. to back So

further to questions. on move now will written We

and finance first taken the Capital talk to please to address costs about quote, rates. being higher you rise measures could The one [indiscernible] in is I due from

As up gone the same interest have for quite time. and stayed rates some

our the adjusted have thresholds that consumers give mitigating policy to card we one credit interest-free adjusting our installments impact. as We

a continue increase the we to explained. cost helping us on affordability We which as our solutions, and plan overall positive Nilhan of is financing very are manage

measures overall credit that these on going financing continue focus the will and we manageable costs card forward. and So the to make are sure costs

next on Our Citi. consumer you in the from is Maksim with question webcast Can environment Nekrasov Turkey? comment

Absolutely.

question. for the thanks So

QX. the this say, are question. High-interest to in there X been part very where been tougher has versus think X.X%, the decisive contracting. XX% rate category, was this that inflation, year accelerated actions environment has is has safe we created the macro taking time early a in of around which environment to to fight tandem, environment last credit government One discretion I at demand parts been some the is seeing are

of our a is results strong definitely in which side, explained flip I affordability. there the interest On our solutions,

competitive is going Black and there flourish is coming impact also, to going demand. Friday, be Our prices, with back-to-school to that the very and seasonality

our AI with electronics recent is tailwind expecting for also market, also our some to NPI still from expect consumer are our differentiators. strategic to to going and bring demand innovation Apple. we We build innovation

Kilickiran why and the on the remainder main for may quote, think Our inflation the and all much growth? Hanzade you you And of Hepsi factors JPMorgan, from do congratulations expected next you presentation strong which the question consumption. explain results. stay consumption slowdown against for versus I webcast drivers on seems please the very resilient question optimistic in year? with in lower a Can across bit revenue comes and is thank the My the your guidance,

mentioned Nilhan based revenue. to in a where that on guidance line the in going question, the we higher As our is and with are period previous higher back-to-school have

markets have revenue. definitely, trade base. our it's much our quarter to terms impact ad We And of XP on XP will impact to will continue versus that quarter positive flourish going we business. the to expect back, goes our top, increase increased be growth. a will X deliver of to back-to-school. part is as business with continue with a together in on And And as the user electronics better position And X going premium premium our this business in revenues

I webcast as next changed taxes Sin you is quote, any question as have Sinan Our from consumers with in August have from cross-border shift the Road of and detected Amber Investors XXXX. behavior

this has August. to slightly been effective say speak early is change end the I of Sinan, because will

a share. the business. It's minimal tailwind promised because comment anything, on extremely global have to I -- impact of X% but we this inbound our want underline demand we around also to quarter's this Hepsiburada have Obviously, So days, only had in call. trading fuel to next if would I

heavily to imports. on competitors, which change a global has such expect would impact relying we So

a but to bring the could would this an our to here. give wait like and before impact see tailwind we So I real business, estimation

question CT Maksim or competition in with you expect see XXXX would down and the I do quote, to as a trading promotional pressure tougher material a 'XX of up, is question The activity? half be higher you next consumer Nekrasov on result to a from follow-up of and follow second

pressure there more credit tough. because on So installments number of more -- definitely available are is the consumer is rate environment getting consumers for Interest pressure the still high and is limited.

and it. And generally as of can landing yet, to But And terms business. our months. external headwind our going we in of expectation have metals seasonality affordability taken, measures all the the with to our performance strong we in share built, next deliver in is thanks with because a you of strategic as this coming the part in higher that. forecast, into also and impact platforms X, half competition thanks think the So see own to expect performance, growing the we other a logistics our are in we we year. our

as get profitability half? from follow-up bottom in from do is the question line to Next a you follow-up, and [indiscernible] expect Capital [indiscernible] second question a to I quote,

mentioned our improve the And line dollar hard continue the our EBITDA in main of think it it's last profitability the will rate tailwind until materialize bottom coming to market to would profitability. the end little months But the I predict was the gain in to that As year. the year. before, bit premature I on will definitely we a comment be because very

will to on improve this be comment would for sure. line it So continue EBITDA bottom point. But to the hard very at

to solutions quote, further any capacity or insurances. Our your is and for funding [ Hepsi [ partners I on plan Road asset-backed doing from ] from there balancing you funding affordability funds? Investors, and with a ] Sinan your next follow-up limits Amber capacity question Sin question are Do also

own any sheet definitely BNPL our different not and asset-backed have do balance on bond We funding both our plans, also issues. using and like instruments issues from securities,

it We initiate will second and the our will of tranche security shortly asset-backed program, continue.

funding business the as affordability for we the right have healthily. solutions, in grows So tools

to questions I time. gentlemen, you. management Thank this there any over turn for no are further at comments. the and conference will Ladies closing now

questions. and listening so you appreciate you. Thank time us. We much your Thank for to

may Ladies have calling, for good and disconnect your afternoon. the telephone. and you is and conference now Thank gentlemen, you concluded, a