- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by. I am Galley, your Chorus Call operator. Welcome and thank you for joining the Hepsiburada Conference Call and Live Webcast to Present and Discuss the Third Quarter 2022 Financial Results. All participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question-and-answer session. time, Ms. like this conference turn At to over Instructions] I to would the [Operator Investor Director. Celikbilek, Helin Relations Ms. Celikbilek, you may now proceed.

Helin Celikbilek

slide Harbor differ results of be information of call. Thanks, our about X, for us Galley. Murat Safe reflect the following pleased Emirdağ; factors, earnings Öz. today’s CFO, our your questions discussion, the today deck, joining XXXX, the filings could press as SEC in to actual I’m The for these Hepsiburada's described and management’s today Thank XX-F and cause factors Form third to today’s on today’s forward-looking X-K, quarter CEO, information materially which with you from by release, filed the statements. joined on for including Korhan during to call our XXXX as May except to views responses are date well SEC this refer comparable supplemental only. other as to risk to today’s results as the release, well reconciliations. a directly Also, of update today’s undertake statements supplemental from Certain as Please obligation do our forward-looking materially today’s measures, forward-looking these actual call required We or press as the made not call. any non-IFRS IFRS and deck, may as slide presentation today’s law. measures differ earnings certain appendix of refer release the most Please the for will relevant IFRS well to reference statements. by we revise non-IFRS on statements as our

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

Murat Emirdağ

our for I a our I Korhan thank financial will Welcome turn on us joining figures. call of quarterly continue the an then update with will Helin. on in-depth everyone our you to for you, and highlight over Thank operations. begin an summary and today. discussion

brief quarter look at our have platforms. third let's a Now,

Türkiye to in we XX%. challenges an the showed growth our reaching environment continued has quarter, of the results the in third growth and continued Adjustment delivered X%. the quarter we of the year-on-year last year. to frequency, In in in X.X in consistent unadjusted in despite GMV customers our first basis, a month in for months percentage inflation of periods X% continuing contributing contribution about to to macro with rise, our was the same momentum inflation in the bringing to XXXX months slide. nine compared XX% growth declined GMV Next inflation, the first and year. inflation third achieved the progress XX% XX% XXXX. Fueled last compared QX nine for growth first On in X%. for the improvement the by third points growth quarter when was quarter X.X% nine On XX% during same We adjusted minus by revenue older active an gross basis, quarter margin third older GMV growth

its out performance, our recent point upon financials. I EBITDA summarize would to development on effect touch our I like and our Before

course. of Settlement As we resolve to action $XX.X both these related Settlement reached in entry in close, lawsuits the or the by agreement lawsuits U.S. judgment pay million the agreed we approval a entirety. to have to subject Hepsiburada putative the The to and class remains respective

to is for this GMV amount. million as accrued at X.X%. year-on-year had Settlement Once our TRYXXX percentage one-off prudent to a a processes are be X.X relevant all Despite of by provision expense approximately corresponding of EBITDA These towards total TurkCommerce have negative $X,XXX,XXX one-off, percentage we expected amount the finalized, the the points relevant will improved the our accordingly. to financials. impact expenses $XX.X million. part contribute As on management, booked

basis. EBITDA these for of an X.X% inflation for a would negative and in an inflation on Excluding X.X% percentage adjusted unadjusted been GMV QX have one-off, XXXX negative as

the On flow. another the positive following cash with front, we free are cash to quarter glad positive flow a free flow cash QX, have delivered in

Let's our progress profitability. slide at on on to next our the look to move path

slide. Next

As a our as experience, possible and of was of second effectiveness expanded smart continued on selection that to on our end-to-end capabilities. of our customer to I the commitment improving merchant base continuation slide. the use the from profitability our to data this this marketing quarter, performance path progress emphasize quarter we optimizing continue made through shown our must through science

metrics. slide look our to Let's into next move on operational the

four rise basis. quarter-on-quarter XX.X All grew a a up year-on-year reaching a growth basis, by million in frequency yearly base healthy as Next quarter. third to drivers on both X.X, Active reached X.X customer as on Order the have ago. year continue slide. well XX%

in momentum factors attractive to selection. model, bidding XP-XP and drivers value in Continued our hybrid key was attributable growth few including expansion proposition

sharpened the a of use and on Additionally, tools with driven we in the through effectiveness and marketing engagement marketing data of have acquisition. focus accuracy retention improved our

have We developed regional encourage capability with segment. offerings, sweepstakes our interaction as which gamification our also customer such

broad the access in the Hepsiburada served NPS million become fee. relationship to to XX% solutions. to product peak higher five is held performance has of engagement bolster shopping in services sector summit our Hepsiburada technology, the service them. leadership instrumental our customer order robust thanks as for third our free active our to three merchant showcase and season. in has in our back to prior on free Premium to Hepsiburada XX,XXX gaining a home program XXX,XXX. in well back cash merchants excellent to e-commerce Also of have exchange third others we in platform Hepsiburada for opportunity SKUs nearly Turkish, continued members our in In capabilities, the in leasing we of and monthly large cities program. our exceeded on-demand members valuable to To mentioning Premium delivery in frequency. quarter, Meanwhile, to driving certain among subscription rise that quarter. contributed Our have the subject to and merchant merchants. benefits summit an procedure This to number After ease the rising only efforts range as XXX been worth conditions and logistics to members experience include Premium our a access streaming months, This also

Now, I would our enabler gears essential update even merchandise customer and propositions. and on robust like to capabilities, switch are which for logistics our

Next slide.

nearly HepsiJet, through X,XXX service, nationwide delivery mile serves last network carriers. Türkiye across Our with a

operations offers the ago XX% XX% ability from quarter to orders live ago. As quarter, HepsiJet delivered and of year third prior the quarter, compared a Marketplace their third of parcels customers to its In track to XX% delivery. the HepsiJet the

portfolio HepsiLojistik Meanwhile, warranty delivered day customer XP delivered another to operations parcels next nearly period. oversized offers during operations the providing performance, of to XXX logistics the our this such the the HepsiLojistik convenience. HepsiJet client cargo HepsiJet the XX% by large Regarding services total. next fulfillment of appointment delivery XX% in and HepsiJet quarter, clients orders oversized on in large for delivery arm from during delivery XXX day.

On to the like next our services. slide, on I give financial update would an

product Hepsipay since as solution its around million our January, Buy the rapid over passed penetration by the November. of platform a third million During Hepsiburada XX% and our reaching end quarter launched through used the GMV users quarter XXXX. by been it's Hepsipay continued marked of Later milestone wallet. of users, Now XX,XXX has in the X over within Pay XX in Meanwhile, customers had hundred with

shopping reaching risk We new the to while on added continue focus e-wallet manage and announced credit quarter, Hepsipay optimization. features customer our and improved growth experience diligently maintaining verification Post third capabilities. with

without to transfer to cards, money from debit In accounts a Hepsipay card. also existing their top from bank addition by to transfers up credit may ability use now users the or e-wallets their needing

take slide, strategic to parts respect let's next a of other progress our at the our look assets, integral ecosystem. On with

slide. Next

to strategic suggest diverse assets growth of and are support our ecosystem potential. our Our cornerstones solely

our of solutions. adtech those is One tech

portfolio early testing the optimizing execution. operations, In playbook market search quarter. these ads, focus Azerbaijan by were this with previous continues a focus and XXXX Through since year, includes and market. in used for which ads, our more having HepsiAd product cross-border line merchants QX the have display serving enriching capabilities. HepsiAd proof-of-concept efforts, ads we XX,XXX it chosen on on international we Our to in than as its sponsored our been

We ahead. continuously opportunities evaluate our other international will

Our this new was compared Market the with customer business, continued quarter. where X model. operating the marketplace Hepsiburada operational unit in up economies XX% by grocery in its to experience Hepsiburada points this grocery online and focus Market platform minimal order third model, involvement. on a ratio Under enhancing location second percentage It perfect quarter with as serves

model remain tickets wider over to customer Overall, overall scale focus And sales flight ticket operating X,XXX on unlocking quarter on up of and for time. in synergies discipline asset like during product we assets monetization to yet committed year. the the management. from period With between service, business cost to for continued cash third X,XXX Seyahat the diligence we our growth again, it in same engagement portfolio, fuel its operations nearly to ecosystem. of Hepsiburada's enabled Hepsiburada expand focus and further help need traffic and strategic Our last

say the a few me full on our for guidance words Now let year.

around range GMV raising first for expect on the slide. period same reminder again the for percentage and XX% X% unadjusted growth a our to around within basis. guidance line a for our growth of recorded is full growth growth performance GMV In path to compared last while our is EBITDA considering of XX% Having Next inflation growth GMV of full the once nine year. to year in in month remain for EBITDA focus are our GMV the with to percentage and this negative we XX% X.X% A from guidance profitability, kind a negative on an GMV the deliver of that the to we GMV year. guidance our drivers, keeping

be nearly we to fintech, operations, not I transitioning as accomplished note in and have of logistics, also in an in would advertising, as to we e-commerce, June, developed just final to role am more. coming will opportunity cross-border a ecosystem as had lead strong capabilities, of with what XXXX. a years, have and As X, Nilhan I that CEO I for will new four like board be and say am proud grateful the I January integrated I Onal a extremely as but have Together, for team. today, on to announced Hepsiburada technology

at my commerce Hepsiburada, digitalization position Türkiye. strong pivotal fortified a in played household of brand and the in our as we Türkiye During role the of time have

the I listening. journey remain leave to in Thank floor ahead, I future. Looking Korhan. now will excited the about you Hepsiburada for

Korhan Öz

QX average to rise basis, growth. The year-on-year performance, holdback in billion, Adjusted reasons, unadjusted and on XX% last corresponding Murat, for order This reflected In quarter mainly second we a our to to certain you, to order full to the budget-friendly X% including necessarily to below decline not of generated indicating everyone. while TRYXX.X purchase compared became due inflation for inflation an the in third the we partial for does inflation, the impact growth. and value, get quarter several of TRYXX Thank categories. substitute on billion GMV tendency GMV GMV year. inflation decisions due was growth decline choices in customer our continued similar recorded welcome

factors, We also dynamics the since of and was mix during it's year. other This macroeconomic marketplace another inventory factors Meanwhile, prices but to year quarter. XX%, of XX% and this carryover around market not as believe selling behavior, and dynamics including from affect categories. inventory may limited which might campaign customer that one GMV in the several calendar was GMV quarter in second impacted to, the from ago fluctuate XX% share environment, competitive certain quarter such

shipped performance. GMV and same growth inflation, increased revenue QX revenue revenue to in last growth in revenue focus on to in to XP I delivery to The by decline decision in X% XP mainly revenue revenue, slide, to in and X% This revenue. adjusted our basis, discounts last mainly year. six-fold GMV contribution the revenue the last reason period therefore GMV the by strategic increase back The marketplace nearly X% decline tendency favor in is XX% operations. for the campaigns like When despite our compared same in year. revenue growth impact service compared the inflation also compared other XX% our The was customer would trend result. share to third on next by year. points quarter period achieved of reflected and our unadjusted X%. behind the X% our in in for the mainly On the with percentage in mix of substitution discuss from affordable for and cutting our XP increase due category's increase On an non-electronic of X improving to grew XX% of due decline alternatives profitability had of our an against XP this on our revenue, was the

the marketplace revenue in profitability discounts, deducted and rise unit to delivery in significant path The focus the on on service XXXX. July delivery was XX% so in our service mainly from And campaign also revenue, growth and reflects increase to charges revenue. which attributable CapEx in January and are

I would discuss the in Now contribution our like gross slide to performance please. next

the operations quarter higher gross to was quarter the to points compared lower third of our improvement discounts in the with marketplace third gross was Compared service adjusted quarter and inventory management revenue margin on from attributable focus by the year. streams. margin of in to contribution in retail the slowdown monthly revenue X.X% improved mainly quarter second Our X.X points X.X% contribution our given and inflation same the customer an and inflation delivery and percentage XXXX, in other last rates. the This

lifecycle Net decrease was sharpened as quarter marketing percentage and writing to of point on back and in packaging enhanced expenses a engagement quarter, was this and decline return in in slide less the expenses in The year. This and point decline due please. GMV expenses Hepsiburada channels. customer third investment decrease was point expenses. Market. slightly shipping total general XX.X% decline in of in to last OpEx percentage packing efficiency, The XX.X% was the and the as advertising across in G&A including X.X shipping marketing result advertising of well the shipping of expenses retention other percentage on Next X.X enhanced of compared of focus on expenses against mainly in X.X percentage as

in owned pivoted including increases, details already and salary which has dependence will other expenses, settlement, The chart, model talent the OpEx to at the so million. see includes As business it the discussed, factors expense our of reduce involvement explained resources minimum. on more not it keeping rise provision been has operational of several TRYXXX.X and on delivery the the settlement you as onboarding take of I your results of the Murat litigation time. G&A

OpEx have percentage have the Accordingly, as X.X% Excluding a the in percentage been XX.X% one of a third as G&A provision, of point a impact of would X.X GMV on would the of expenses this quarter. been decline GMV total year. net percentage year over

a the have look on our at EBITDA in Let's bridge slide. depth next margin

mainly drivers QX As indicating negative spending. in as our advertising a performance gross ago. of also was and TRYX.X negative point in X.X its of a a contribution EBITDA a This This for as adjusted from to was attributable percentage solid the billion over quarter TRYX.X to improvement EBITDA previous of margin third year to GMV continued X.X a inflation lower year of squarely percentage XXXX year the improvement. billion GMV X.X percentage point negative function a formation, are by a XXXX quarter. EBITDA percentage compared percent in corresponds improvements

provision impact a of one of would X.X third in percentage the quarter. higher as GMV point of have been by Excluding the percentage EBITDA

property of cost CapEx the compared the to and to Next, third employed million the cash and quarter, in billion is consisted employees few negative million of lower the who would XX% operating the to TRYXXX rights. due generated ago. networking. our and tech of around mainly which to equipment cash by activities TRYXXX a operating in Net platforms. TRYXXX mainly words cash of the a I provided quarter generation cash flow CapEx from of like dynamics. free development year was third around related in of of flow and for mainly software was which a positive are the on million consisted change in loss We TRYX.X decrease activities. Remaining web mobile net our Thanks say and positive purchase

networking networking to -- the QX with TRYXXX and at We continued negative capital million. change operate was capital in in

cash some highlights borrowings. would our Now to on and share position bank I like

As million XX, at and this This September equipment, total time TRYX.X cash, total of we mainly investments. U.S. September and dollars. was around XX, in which is have in $XXX of financial XX% deposits billion in is

generating the a the continue end, mainly to Lira cash with fund to appreciation us our than position lower in was cash Compared Our inflation. the decline due strong to potential USD combined against in our negative the capital enables decline networking currency the capability resilient liquidity position to at cash operations. keeps Furthermore, fluctuations. have to our and dollar year Company rate U.S. total Turkish

On side, are which we have end from in the TRYXXX and million our Lira. of Turkish borrowings Please bank of XXXX. note borrowings these TRYXXX the all declined at liability liabilities, that million

Next slide.

my to compared had our loss achieved As few year. momentum. quarter expenses, was in Overall, environment quarter quarter-on-quarter This leave on I EBITDA, a mainly show and to EBITDA process margin, one gross would The advertising several presentation, like challenges. this the our I at second on provision enhanced impact continued our contribution and lines net of a end settlement results loss with you with expense of including net improvement the third highlights financials litigation macroeconomic on balances.

management. the This line can on on you we discipline, We our now GMV acknowledging listening. continue execute GMV EBITDA at concludes with questions. to our for open while guidance plans X.X% to Thank we from challenges growth will range to negative the for for guidance of uncertainties, we our Looking a negative of and cash an presentation. unadjusted within cost are XX% a to XXXX. keeping We and are the X% basis, around inflation to as our track full XX% confident increase percentage our profitability, path year for the and on believe

Operator

Ladies will Mr. gentlemen, any We and apologize. now the do this have Unal you. Ladies time Instructions] turn question Goldman ahead. session. conference gentlemen, for begin comments. this at I time. at there the I are Cem question-and-answer closing go sorry, a we will I'm and Sachs. management questions no to [Operator over Thank with Please

Unal Cem

as and understand presentation, the to you you new growth roadmap. for see going you Murat and competitors also loss, like My also, will also this your quarter? budgets going as forward, advertising e-commerce kind the you your already any how discount Korhan start on of you well cash as in And will did new and cash? profitability this I'd e-commerce be by to GMV expect this spend within to competition on spend some Thank impact the to to Thanks, much. reduction in the see to there advertisement how of the forward? -- see do to aggressive on market see related easing the be question impact share excess in start do did from fourth improvement significant spending, XXXX? you the in how very new post the promotion and And indicated and the loss lower And plan do kind if and

Murat Emirdağ

be respect and Jim. With of cost for to other remains I the we fair it's first the like you, market the cost but say continues your Thank to with to high. questions leave to competitive, guess, respect where first. Korhan I to still will guess cash, I the of to that will I competitive believe landscape, marketing comment floor answer growth

based is in by expect it mentioned, changes, X, our still like be XXXX. effect with to respect guess on January loss And we to valid observations. I So the you regulatory

working the and are impact first time regulatory as as the from a getting and maybe we that already yet you discounts. to marketing also actively for speak, timeline, XXXX. as and for numbers those we is the that as fair working within and framework of promotional With towards mentioned, framework. as side efficiency environment spending you as January a line framework X, a believe that already January observed ready note, is of actively open, discussed, transparent as execution will regulatory on also been more the be just is we regardless we publicly New team, said, said, And we on And to already announcements, which new but see be bring prepared X, XXXX. we can are have and regulatory provided all Year, our our marketing efficiency, we shared the in actually implementing of players. So, are it seemed operating points restrictions increased With into

for stop the Let here cash me and hand to Korhan question. over

Korhan Öz

for you, question. Cem, the Thank

so cash, On calculate be forward. will there first the payment merchants among will position are a we going how it the cash the on. terms merchants impact and and differentiate in for a To the create distribute because in the on reduction GMV newcomers the the for our the depends to and side, months the months and excess six we promotions and existing

talking under the our So, in this cash about flow more is coming quarters, we progress and be you. Thank will projections.

Operator

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

Murat Emirdağ

Thank you.

part team we executive Hepsiburada's in thank to this customers more journey. participating my also and directors, business like to results would management me to call our the again for of partners, the board investment over over much gratitude kind Hepsiburada would founder, your take to of goodbye. Before to amazing once again you and mission to community support like one who of and And community support relentless you and trust and close to their announcement Thank have our the I I years, the thank for rest all minute been the the years. and the appreciated. for our our call, express

Operator

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

D-Market Elektronik Hizmetler ve Ticaret A.S. (HEPS) 6 Dec 222022 Q3 Earnings call transcript