Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by. I am Mia your Chorus Call operator. Welcome, and thank you for joining the Hepsiburada Conference Call and Live Webcast to present and discuss the First Quarter 2023 Financial Results.

At this time, I would like to turn the conference over to Ms. Nilhan Onal Gökçetekin, CEO; Mr. Ms. and CFO; Öz, Korhan Helin Celikbilek, Director. IR Ms. Celikbilek, may now proceed. you

Helin Celikbilek

our joining for I'm our Hepsiburada's Thanks, today to operator. quarter CFO, today for you by call the call. Thank Korhan first Öz. Gökçetekin; us XXXX joined on Nilhan CEO, Onal be and pleased earnings

today's The our including as statements release or differ update revise May information slide as to supplemental actual your press on other information except responses are slide questions, as Certain XXXX, management's factors views call described as to following X-K, today's with no results date cause and earnings to today's these risk today's on and these may for obligation statements. by statements, of discussion, required made XX-F SEC law. materially the of from differ refer in only. Form the forward-looking X, SEC to filed actual on today's reflects factors the safe We filings forward-looking undertake this deck, could forward-looking harbor the Please materially that statements. results from well release,

supplemental we today's deck comparable Also, certain during our measures call. as refer and the the measure reference IFRS non-IFRS to a of appendix well to non-IFRS Please as presentation for reconciliations. press the directly release today's of will slide most IFRS relevant

of will available be call on replay Relations this reminder, website. Investor a As a our

CEO, to it hand our With over will that, I Nilhan.

Nilhan Onal Gökçetekin

you progress Thank the us. with on announcement you Welcome, and call results you, and be of to during joining I'm my pleased Helin. our everyone, quarter. for present so you first thank second much today

years. particularly in level as July of in growth. well noting EBITDA Turkey by was challenges worth X the guidance is EBITDA the since [indiscernible] in here this the our of largest for range highlight in proud In this obvious despite This Turkey. IPO achieved quarter highest earthquake as that - that fed the our unfortunate over It's we particular, marked XX. of I'm The February beat

same resulted orders compared value XX% of of Our robust exceeded year our the growth past XX.X months. of million to the growth This over XX of inflation quarter last average proposition. G&A XX% on the compelling back from

at First GMV engine sector was growth XX% inflation. than quarter

Continued strict of surpass our expenses. EBITDA enabled marketplace GMV on us in from profitability optimizing growth reduced This over and electronics operations marketing our growing our prioritization resulted spending, to loyalty breakeven guidance. and focus and operating

NPS reflected percentage continue represented This solutions a GMV in year. point milestone a of our high-quality over as last performance EBITDA This in was Turkey, e-commerce X.X rise sustained of our customer appreciation. leadership and same period percentage services market the of in win where the to in

our appeal which Hepsiburada enrollment Marking to million of program, proposition members. in led X a another premium value milestones, surge of the significant a to the surfaced

proud program are in that developed first our locally to We and implemented is the note the initiative membership-based loyalty market.

another worth spending our guidance on It's this quarter. beat minute

our a strategy, of the of Our market our million. This by our of the despite confirms TRY execution GMV points, delivered performance XXX positive effectiveness challenging of XX% we and EBITDA surfaced growth X strength strong of meticulous guidance conditions.

Turkey. XX-month its our given XX scale XX.X impact, impacting quarter, to due This earthquake people million customer nearly million, base remains mainly active in over TRY

We have million XX seen signals at XX% pre-earthquake total or of March. around a orders return levels year-on-year. in to Meanwhile, growth

lotteries, digital was takes QX growth [ph] products, and order still our as of the order such around year-on-year. X% in the Excluding sweeps

enhanced value with Super return our loyalty am growth are order being quarter-on-quarter. our X.X%, proposition, I affordability Our solutions services, and customer a and confident year-on-year build coin from and including loyalty marking These very growth to customer and our X.X% strong frequency customer ability XX% diverse to achieved rose in drive program. XX% delivery engagement.

merchants with capitalize our of continued net number QX. On scales on exceeded reached million a expansion by platform selection has our chose [ph] Consequently, to XX%, XXX,XXX a categories. yearly XXX of of the of who end rise electronic money

Our to cycle in solutions merchants set to better management. value tool enables merchant our life from welcome advertising that proposition addition logistics our services end-to-end

February As shown third platform, earthquake impacted merchants suspended on one business. X,XXX this our temporarily almost slide, which the on their

We have logistics taken and leveraging help capability. immediate support them, action to our tech

continue X-year we we in addition, our for Turkey launched In a the program Ultimately, are local. to support.

in our the to capabilities and dedicated e-commerce entrepreneur are to leveraging foster all rates. We merchants women abilities

early As March, defined and profitable you achieve I outlined in strategy growth. to our will recall, win

by Number into diving loyalty this. Before progress premium. is through let winning customer summarize me one achieved the Hepsiburada priorities, on our

here, share signals our own volume estimated be we'll believe current within and consumer able our marketing spend. potential Our we optimize strong growth to

focus will affordability and differentiators solutions, we levels platform on high-quality delivery our services. include service sustainable on two, Number superior our that the

These competitive Number deliver a three, profitability our strong income to and are in on These pursue offer upcoming are customer our mile to muscles driving expect strong will four, very we we'll landing while core best-in-class last retention, operations And pursue number cost growth retailers. believe we'll sustainable delivery we BXB services by that position focusing our profitability. in securing and optimization. and the strategies other years. now pivotal payment and

the quarter. to highlights million continuously XX loyalty our Now in Achieving for have benefits a at months serve look customers. to for progress let's program's member look X this our value money best We our first improve program. in milestone

higher optimize Growing for Program this and frequency our non-numbers, to remains helped monthly while key objective our year the order advertising we resumption. us members generate efforts. marketing than base ensure membership which

analysis only our are its cash recognition month, free program shipment, we subscription and great numbers July, for that customers Hepsiburada streaming transaction per level TV and on-demand Premium Since independent and program indicates XX offered company's have been a [ph] of and was strong for other core NPS XX of XX.X million offering several value above This the satisfaction discounts. show service Premium NPS. overall The Hepsiburada the from the numbers. point [ph]

payment our payment e-commerce as and cards, other player holding and shopping later loans. with now HepsiPay, operate we of solution. instant key well we we one on finance differentiators. accordingly pay capabilities [indiscernible] highlights equipped such platform, our multi-credit installments some share payments and buy payment are only licenses me let through the On Now in consumer And with are

Here than million. but of and some users the solutions of of was in rise We reached on a around remarkable growth XX% quarter, our [ph] basis. HepsiPay of X% This QX 'XX and XX.X now share X.X% total QX on doubled affordability to performance a rise HepsiPay GMV of our QX generated customers. The continued HepsiPay. by in more highlights witnessed are XX% previous GMV year-on-year non-card on

XXX,XXX rates provided this unique our with e-commerce utilized later came customers. competitive now through in Meanwhile, XX,XXX quarter by customers pay banks solution for loans rise a our quarterly Around XX% of by achievement people. this products the on been of buy shopping has over market

XXX,XXX Some orders quarter. by generated using solutions during affordable this

our credit also tough affordability offer And managing needs this meet in our range options with expanding are We we with the solutions, macroeconomic continue conditions. to aiming customer associated risk solution. diligently of relevant, accessible that

Now companies is is leading differentiator in another let's hedge, which to delivery HepsiJet on move Turkey. clear one mile the for last of Hepsiburada.

during even customers to scheduled or in life and HepsiJet. and the next-day delivery enjoy your neighbor. return address, customers from and next-day options Our value-added address tracking same-day These while delivery delivery change cancellation delivery services of delivery, parts on rescheduling, delivery, include flexible of routes

only delivery service. provide of reflecting our company To logistic XX.X based in high Turkey convenient quality of these of on with NPS our a its knowledge, the to all of according QX, the internal it's service are conducted options to in reporting best strong we

quarter to solid providing saw reliable capabilities This delivery next-day percentage ’XX HepsiJet. Moreover, to quarterly to our our oversized of last continued improvement, ex year our from significantly particularly its delivered year. fast last from QX, QX such XX% a parcel penetration on shipments XX% [ph. points parcels dedicated and large year-on-year. XX% of During up our rising underscores the service, total in growing delivering commitment through X platform, XX% XX% HepsiJet performance volume, arm same

penetration enhancing this 'XX and customer to market its has performance I Launched our our satisfaction convenience HepsiJet highlights encouraging. level our strengthening marketplace. contributed early only strong ex-largest in to commitment HepsiJet fast customer better position. find

we policy. initiated company-wide we and to centers continued focus our improvement our this in driving already remains of all operations growth, a our robust call review standing commerce adopted identify profitability. cost management operational commitment, prioritize With opportunities all As effectiveness. frugal We primary on core and

and continue in and approach a enhance earthquake through advertising contribution, financial strategy growth stronger inflationary and to will contribute has optimize and our XXXX QX long-term to in spending milestone enhanced environment OpEx strategic continued despite high prudent our Turkey. mainly EBITDA This performance growth. Positive a was the sustainable

of We purest this sustainable trend are promising to glad growth our in [ph] and profitability strategy. see

and strong these strategic position solutions for mentioned, a enhance to This operational a revenue By our logistics forth priority is sectors. offering fostering ecosystem extraordinaizing our and new opportunities. methods, respective priority. our As fintech while key [ph] third range we Hepsiburada and own efficiency dynamic valuable strengthens already partnerships creating cross-selling streams, strategic brand parties unlock services in

while approach, of this e-commerce. With the to results are shaping deliver sustainable positioned we future well

a percentage quarter rise of in parties QX, Our first volume platform units solid compared strong points total year. XX% XX% its to of delivered recorded partial showed HepsiJet, in same O by volume muscle, a third Total X customers. reaching last increase nearly from

for the all expansion cash acceptance throughout which As of the in known to value year. a initiated anticipate is payment of service we HepsiJet of HepsiJet partners, the available customer exceptional HepsiJet possibility new by all And our of making portfolio. its delivering analyzing test this door, of also service, is delivery. on the purchase

quarter, debit of its while using users. progress expand retail to our providing its HepsiPay transactions, another first payment to Now Recently, physical convenient card launched for me we options platform. our move strong let continued of muscle In capabilities to for HepsiPay the working both HepsiPay. the enhance other online customers and experience

allowing HepsiPay payments. linked end which their cards feature, use card accept our customers to at QR payment retailer, debit to to also is debit the

this customers providing paid gain In can to with support design, the addition, in customer that With our loan customers require. flexible their new freedom our financial any introduced feature offering the they financial decisions. will even for them utilized a and funds as we greater access be when offering, and purpose

player ongoing This product us with our to development, our efforts of fintech Turkey. user experience improve leading becoming combined the help will options and expand our consolidate portfolio to target in meet payment

on words guidance. my our presentation few I a with QX end

Our cautiously the by environment, performance navigation strategy. compounded on we confirms our robust remain entered election our successful tough date similarly our second of market performance strength conditions. yet, uncertainty. a to challenging based quarter of And first and in optimistic quarter also macroeconomic We quarterly

to year-on-year April in XX% given 'XX. inflation we expect expected Accordingly, generate GMV to quarter, second rate the around growth this of inflation in available be XX% is XX-month

will Our also EBITDA positive growth continue.

are figures We GMV within for of range a expect inflation. percentage to These of deliver X.X% X%. adjusted as the to

thank With you the give and I this, quarter. CFO, our color to leave performance Korhan in Öz, to the financial our more floor for listening to first

Korhan Öz

welcome, affected reaching TRY our million billion. Thank momentum progress you, adjusted first XX% fueled strong that orders, on demonstrated growth by and yearly for from we around was growth and in everyone. year-over-year growth basis, sentiment, XX% market consistent quarter. frequency. factors over continued Nilhan, XX a QX inflation, order during resulted in On Despite the XX.X GMV marking GMV the

for and inflation, margin, focus at on since a our achieved that our delivering year-on-year We and adjusted a highest on expenses, highlight compelling proposition. and points level yearly must adjusted delivered optimizing revenue this for operating percentage XXX million XX% value unwavering On discounts XX.X% a here represents was through improvement. contribution TRY basis. I this was IPO. growth customer EBITDA on inflation our X.X gross the We plus

last the of million, TRY X.X% in then the margin slide figures. percentage an to increased In X for highlight to unadjusted key period, gross improvement positive a inflation same with on adjusted inflation revenue next basis to to XX% year. on Again, compared In the EBITDA adjusted move at contribution quarter, growth XX%, also respectively. point Let's were our first GMV QX the for is X.X and same inflation. and quarter the for the

purse our of move [ph] tie next quarter's to slide Let's profitability. this to on the performance

of profitability QX as in quarters, our consistent Following to well. previous on pet the we improvement trend progress maintained XXXX

performance the priorities. our of Our confirms effectiveness on execution

customer experience We through strong the marketing, model, data-driven challenges with navigated our diverse as well XP, as successfully hybrid solutions. and applicability XP business

of discount focused us as This and represented optimization milestone Continued line the costs customer same percentage rise year. are GMV growth enabled last of percentage GMV point in X.X positive an generate and top EBITDA. over to a EBITDA on period

supported was performance. This by On affordability the value the performance let's loyalty data-driven XX into details slide, attributable solutions growth campaigns. our in QX. marketing next came our GMV and look million of Hepsiburada orders XX% our GMV our appeal to proposition, Premium through of attractive program, of

Excluding generated growth we around less digital repeat segments. with our value participating X%, the of of than was the that these the digital while XXXX, us X% enabled in customer order orders QX products, GMV products interaction

During of marketplace reached in the compared first quarter, 'XX. the QX GMV XX% share XX% to

to in business our X.X see said, market. ago. a the in strategic continue the advantages of share compared competitive We XP long advantages With the wider to selection, to and quarter that remain one year XX% the first the facilitating pricing. GMV operations competitive our term, of split non-electronics in of in in Meanwhile, the availability points rose a percentage XP

would like next contribution the our and gross performance. I discuss On slide, to revenue

XX% mainly revenue, some by increase revenue. advertising service subscription and streams, revenues on our to X% and growth increase and like Around give PH fulfillment other operations revenue includes was our that third-party services delivery would revenue color in in revenue our revenues. bank marketplace I XX% in achieved XX% First, revenue growth

percentage margin both sequentially. in gross X.X%, attributable was lower inflation quarter and contribution last marketplace the X.X of compared first discounts, X.X This management year inventory points of Our monthly in with the operations, in mainly the rates. and was and remarkable same retail the slowdown quarter customer to percentage to better points a improvement

the margin, decline the was percentage of decline point gross expenses payroll decline to a improvement partially packing performance which offset EBITDA percentage X.X due point next outsourced in on in by rise points mainly X.X to percentage of The X.X move and point point operating expenses, percentage percentage in a percentage expenses net Let's as a and shipping contribution percentage EBITDA expenses, in X X.X X.X GM. slide. point year-over-year other in percentage advertising in and rise as GMV

GMV compared first quarter, was So of lower X.X in percentage of to this thus in a XX% percentage overall, last OpEx as points the quarter X.X% year.

continued percentage the of GMV EBITDA its improvement X.X previous as sequentially by a percentage quarter. points from

Wintrud and efficiency marketing loyalty spending. strategy, data-driven overall in Our [PH] optimization marketing supported marketing channel the

like flow in a from in say million increase change activities TRY TRY receivables receivables. words resulted QX in would payables dynamics. the in to merchants to on TRY trade trade a Compared X.X from Next, and to decrease X.X cash and operating in increase billion few I mainly flow change our around XXXX, cash XXX billion

position improve QX days management to us Better XXXX. faster which resulted helped in inventory turnover significantly our capital working compared

TRY net working capital continue the change during million. We working with quarter. capital to The negative net first operate in XXX in QX was

improved better our which negative tax-related positive was the mainly CapEx free of of are was negative development cost platforms. million who a million, around the TRY a mobile significantly web billion was X.X and TRY of Overall, XXX employees cash in and bulk from of our 'XX. XXX result employed EBITDA. 'XX TRY flow in QX to comprised for due to QX This cash generation operating compared activities, capital of management combined working

Nilhan Now before final the opening questions. for I leave remarks the floor floor for to

Nilhan Onal Gökçetekin

like I five and the over our EBITDA We XXX of this today. this, delivering to defined strategic We end breakeven guidance. we million, robust since points our highest we see our to highlight performance. delivered call, main exceeded with presentation glad clearly the of I'm IPO and would priorities, is our Before BRL

given in the from points us position cash of capital X.X improved points percentage in free year. and margin remainder Generating the positive and improvement resulted confidence our substantial flow. percentage have gross improvement in rise X.X working EBITDA in cash a contribution for operations

for services in suggest method logistics revenue company. strong streams our core fintech additional Our and

strong our is have in evident a results. strategy To and we capability sum execution a defined up,

[indiscernible] with value will intuitive with will As best results deliver long-term to all action create possible we continue a work for stakeholders. to our diligently team,

can Thank you for We the listening. questions. now open line for

Operator

ahead. question line of The go with the is first [indiscernible] from Please JPMorgan.

Unidentified Analyst

Thank you three very good want few have set of questions, I I now. very much. but for only Congratulations just results. a ask to a

of positive expect just growth continue very do a are quarter? second you what robust guiding of And you the are year? to this quarter. see a trend main growth drivers second behind the the And rest the in level in You the high wonder for I that

about The very I the from XXXX. you commission have second is take up lows level your of rates. rates mean reached and you question building already been

level since this was think IPO. I the shared the highest

forward? to be that level know the So this our is assume there discount in any you can going room could a I should should improve don't we stop. managing this what know through further. are if but And the I Maybe I you models. sustainable discount, cut

Nilhan Onal Gökçetekin

so to rate. color level giving guidance one, of take are to going couple the and much, Thank Hanzade. first to we on add Korhan is let you based the a factors. I'm going High growth on I'm answer of

rate in significantly all, of growth earthquake. the the is First QX, hampered by

have earthquake, much shown Excluding growth. stronger we

confidence. have we So

and our our proposition one And up. from strong value customers. The is is to is is affordability second ramping resonating premium value solutions HepsiJet revenue our also the generation third

We we merchants, customers. we appeal. stronger results And in customer I strong stronger are are from delivering partner confidence have attention - building fourthly, strategy, think, getting stronger our and and our

very So in our that's for feel why confident reaching QX, I established guidance today. we

Unidentified Analyst

Before also real of continue a positive mean, sort about this, you quarter? for the terms? going expect you Or Korhan third trend the fourth and to the do year, of - the rest into I slowdown in in sorry some expect

Nilhan Onal Gökçetekin

I in believe strategy, Hanzade. our

in set of well. Turkish be think of It's we'll working I able strong as am year in deliver that the results fortuitously customers. the it's to optimistic remainder well. I resonating Turkey a the

So my expectation is continuation of trend. our strong

Unidentified Analyst

you. Thank

Korhan Öz

since And and far. the then, in been we like question. all could for quarters our X given continued given is our discounts promised so the we - X, improvement Hans, we that optimize will the optimize we customers. And optimizing ago, markets you, Thank to the discounts have

the merchants side. platform, especially new many our on uploading been have on non-electronics we Also,

having and would platform. our to time, more the throughout bring non-electronics higher So more margin

we actions So continue will those forward. going

only And all are to optimize to platform, become as the margin, the the we also spendings side but trying profitable the OpEx forward. well, on cost components going not on and

continue So our all efforts of going forward. will

Nilhan Onal Gökçetekin

is non-electronics with towards have I Hans, think addition want take is the the feeling. mix we rate to the I increase I non-electronics, value don't in our other take And do, think in the on any rate marketplace higher.

of think the I as continue years the momentum year will So coming in balance and in well. the the

Unidentified Analyst

Okay. Perfect. you very Thank much.

D-Market Elektronik Hizmetler ve Ticaret A.S. (HEPS) 25 May 232023 Q1 Earnings call transcript