D-MARKET Elektronik Hizmetler ve Ticaret AS · NASDAQ:HEPS
D-MARKET Elektronik Hizmetler ve Ticaret AS — D-Market Electronic Services & Trading (Hepsiburada) — Q4 2023 Earnings Presentation
40 slides from D-MARKET Elektronik Hizmetler ve Ticaret AS's earnings presentation, Mar 25, 2024
Slide 1: Q4 & FY 2023 Results Presentation
Q4 & FY 2023 Results Presentation March 25, 2024
Slide 2: Disclaimer
Disclaimer Restatement of Financial Information Pursuant to the International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”), the financial statements of entities whose functional currency is that of a hyperinflationary economy must be adjusted for the effects
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation, the conference call webcast, press release and related communications include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the S
Slide 4: Business Update
ABOUT COMPANY WHO WE ARE? Business Update
Slide 5: FY 2023: Significant Improvements Lead to Profitability Turnaround
FY 2023: Significant Improvements Lead to Profitability Turnaround IAS 29-Unadjusted IAS 29-Unadjusted IAS 29-Unadjusted GMV Gross Contribution(1) EBITDA Free Cash Flow (TRY billions) (as % of GMV) (TRY billions, as % of GMV) (TRY billions) 103.8% 160bps 400bps 3.9 96.5 10.6% 1.8% 9.0% 1.7 47.3 (1.0
Slide 6: Guidance: Quarterly and FY Guidance Surpassed
Guidance: Quarterly and FY Guidance Surpassed Guidance Actual compared to guidance GMV Growth(1) 93% to 95% 103.9% +890bps Q4 2023 EBITDA as % of GMV(1) 0.5% to 1.0% 1.4% +40bps GMV Growth(1) ~100% 103.8% +380bps FY 2023 EBITDA as % of GMV(1) ~1.5% 1.8% +30bps (1): Figures are based on IAS 29-Unadju
Slide 7: Hepsiburada By the Numbers in 2023
Hepsiburada By the Numbers in 2023 Monthly visits to HB platform covered a distance were equivalent to … accounted for.. equivalent to … 2 out of every 5 laptops 2 out of every 5 household appliances (1) 1 out of every 2 washing machines 1 out of every 2 dishwashers ... 3.7x the population …100 retu
Slide 8: Strong Execution in 2023: All Four Strategic Priorities Delivered On
Strong Execution in 2023: All Four Strategic Priorities Delivered On Strategic Priorities Clear Targets KPI Progress in 2023 Win with customer loyalty and optimize • Scale HB Premium loyalty program • 2.2M+ HB Premium program members(1) marketing and advertising spend • Grow order and frequency •
Slide 9: Hepsiburada: Market Leader in NPS for the Second Consecutive Year
Hepsiburada: Market Leader in NPS for the Second Consecutive Year All figures are as at/for FY 2023 unless otherwise indicated Key Highlights of 2023 113M Total Orders (1) 41% YoY Leading the market in terms of NPS(6) for the 72 NPS second consecutive year as a trusted brand in FY23 9.5 1.4x Order t
Slide 10: HB Marketplace: Empowering Our Merchants to Accelerate Their Growth
HB Marketplace: Empowering Our Merchants to Accelerate Their Growth All figures are as at FY 2023 Key Highlights of 2023 101.5K 230M Active Total number of Enhanced self-campaign management tools, coupon Merchants(1) SKUs(2) creation and other features in HB merchant app +1.8K YoY 41% YoY Attracted
Slide 11: 2023: A Year of Diligent Effort Yielded Significant Achievements Alongside Our Partners
2023: A Year of Diligent Effort Yielded Significant Achievements Alongside Our Partners Unlocking new product selection, Deepening long-standing “House of Home” platform with particularly in fashion & cosmetics partnerships with a win-win strategy top-tier brands onboard Expanded our fashion selecti
Slide 12: Strategic Priorities in 2024
Strategic Priorities in 2024 Clear differentiation with Clear differentiation with superior delivery services affordability & lending solutions Win with loyalty: Offer HepsiJet and Hepsiburada Premium Hepsipay services off-platform Deliver sustainable and profitable growth Q4 & FY 2023 Results 12
Slide 13: Hepsiburada Premium Program: Poised for Further Growth in 2024
Hepsiburada Premium Program: Poised for Further Growth in 2024 HB Premium At a Glance Focus Areas in 2024 # of program members (Million) 3.5x • 3.5x member base in one year 2.2 2.4 • 40% higher frequency after joining the Grow member base and enhance retention 0.6 program(1) Dec’22 Dec’23 Mar’24 • H
Slide 14: Superior Delivery Services: HJ Contributes to Our Service Excellence
Superior Delivery Services: HJ Contributes to Our Service Excellence Achievements in 2023 Focus Areas in 2024 HJ- % Total Parcels Delivered(1) HepsiJet Penetration 194bps 65% 67% • 67% of total HB parcels delivered(1) Widen HepsiJet’s platform penetration • 59% of total HB XL parcels delivered(2) 20
Slide 15: HB Financial Services: Affordability Relevance Amplified
HB Financial Services: Affordability Relevance Amplified in a Challenging Macroeconomic Climate Hepsipay Affordability Solutions Focus Areas in 2024 (Non-card) Affordability Solutions GMV Penetration(1) 180bps • Best financing UX in the market 5.6% (easiness, convenience and speed) Increase use of a
Slide 16: HB Financial Services: Leading One-Click Checkout Solution Provider
HB Financial Services: En Route to Becoming Türkiye’s Leading One-Click Checkout Solution Provider Hepsipay Payment Solutions Focus Areas in 2024 Wallet Base(1) (Million) “Pay with Hepsipay” +30% • 15M Hepsipay Wallet base(2) 15.0 14.3 • The 1-click check-out solution at HB Integrate into more major
Slide 17: Expanding HepsiJet and Hepsipay's External Customer Base
Moving Off-Platform with Services: Expanding HepsiJet and Hepsipay’s External Customer Base Achievements in 2023 Ambitions in 2024 HJ - Volume Share of External Customers(1) 530bps HepsiJet Serves Third Parties 24.9% 19.6% • 1.6x third party volume expansion(2) Expand external customer base • 1.8x c
Slide 18: Pursuing Profitability: Achieved Through Key Strengths and Cost Management
Pursuing Profitability: Achieved Through Key Strengths and Cost Management; Goal is To Sustain the Uptrend Profitability Turnaround in 2023 Sustainable and Profitable Growth in 2024 IAS 29-Unadjusted EBITDA as a % of GMV 1.8% Grow advertising business, HepsiAd Key Building Blocks • Optimization of m
Slide 19: HepsiAd: Unlocking Incremental Revenue Contributor
HepsiAd: Unlocking Incremental Revenue Contributor HepsiAd in 2023 HepsiAd’s Ambitions for 2024 Ad Revenues as % of GMV HepsiAd products: Global Peers(1) • Display advertising, sponsored 6.1% brands and products, pop-up & push 4.0% notifications) Unlock incremental revenue channels With HepsiAd, mer
Slide 20: Looking Ahead: Q1 2024 Outlook
Looking Ahead: Q1 2024 Outlook Q1 2023 Q1 2024 Actual Guidance GMV Growth(1) (YoY) 78% around 120% EBITDA 1.2% around 2% As % of GMV(1) We aim to continue our GMV growth, focus on incremental revenues and higher margin businesses and target higher profitability margins in 2024 (1): Figures are based
Slide 21: Financial Update
ABOUT COMPANY WHO WE ARE? Financial Update
Slide 22: Q4 & FY 2023: Outstanding Performance with Remarkable Improvement in Profitability
Q4 & FY 2023: Outstanding Performance with Remarkable Improvement in Profitability IAS 29-Unadjusted IAS 29-Unadjusted IAS 29-Unadjusted Gross IAS 29-Unadjusted GMV Revenue Contribution Margin(1) EBITDA as % of GMV Q4’23 TRY 39.0Bn 103.9% YoY TRY 11.4Bn 109% YoY 10.1% +0.9 pp YoY 1.4% +1.5 pp YoY FY
Slide 23: Q4 & FY 2023: Significant Real Growth in GMV
Q4 & FY 2023: Significant Real Growth in GMV Number of Orders GMV Breakdown (TRY Billion) 1P GMV (TRY Billion) Non-Electronics GMV 3P GMV Electronics GMV 34.4M 31% Orders in Q4’23 117 117 8% YoY excl. digital products 33.2% 89 89 41.6% 33.3% 41.8% 113.0M 25% Orders in FY’23 40 40 32 66.8% 32 33.2% 4
Slide 24: Healthy Revenue Growth in 2023
Healthy Revenue Growth in 2023 Revenue Breakdown and Bridge Revenue (TRY Million) Robust revenue through 1P operations & 60% rise (yoy) in 3P revenue contributed by higher 34.3% margin across all categories and increased growth of 35,559 non-electronics 1,172 273 336 1,096 1,682 3,622 26,478 5,618 4
Slide 25: Solid Margin Improvement in 2023
Solid Margin Improvement in 2023 Gross Contribution Performance Gross Contribution Margin Improvement building blocks 11.6% 10.5% 10.4% 10.6% 0.7pp improvement in 3P margin as a result of 10.1% margin improvement across all categories 9.2% 9.0% 9.3% 9.3% 9.4% 9.2% 9.0% 7.8% +2.7pp 0.7pp improvement
Slide 26: EBITDA Turnaround Through Higher Gross Contribution and Efficiency in Opex
EBITDA Turnaround Through Higher Gross Contribution and Efficiency in Opex EBITDA as a % of GMV Bridge EBITDA as a % of GMV Shipping +5.2pp +1.6pp and Payroll and EBITDA Gross Advertising packaging outsource Other EBITDA 0.3% 0.4% % of GMV contribution exp. exp. staff exp. OPEX(1) % of GMV 0.2% 0.9%
Slide 27: Strong Cash Generation on Robust Growth and Cash Discipline
Strong Cash Generation on Robust Growth and Cash Discipline Cash Flow From Operating Activities TRY million 5,019 3,184 2,131 707 Free Cash Flow(1) TRY million 3,873 2,850 Q4’22 Q4’23 FY’22 FY’23 1,746 CAPEX % of GMV -685 TRY 1,146 mn Q4’22 Q4’23 FY’22 FY’23 -0.8% -1.0% -1.2% -1.6% Q4’22 Q4’23 FY’22
Slide 28: Key Takeaways
Key Takeaways FY 2023 IAS 29-Unadjusted basis Double-digit real GMV growth both in Q4’23 and FY’23 31.1% 103.8% IAS-29 adjusted exceeded guidance Solid Gross Contribution margin improvement 9.2% 10.6% +2.7 pp YoY highest full-year(1) Positive EBITDA with a significant margin improvement 0.4% 1.8% +5
Slide 29: Q&A
ABOUT COMPANY WHOQ&A WE ARE?
Slide 30: Consolidated Financial Statements
Appendix ABOUT COMPANY WHO WE ARE? Consolidated Financial Statements Presentation of Financial and Other Information
Slide 31: Summary Financials
Summary Financials (unaudited) (unaudited) (unaudited) (unaudited) TRY million Q4’23 Q4’22 YoY FY’23 FY’22 YoY Revenue 11,811.9 9,120.5 29.5% 35,558.5 26,478.0 34.3% Gross Contribution 3,617.0 2,506.8 44.3% 10,769.8 5,754.0 87.2% Gross Contribution margin(1) 9.0% 7.8% 1.2pp 9.2% 6.5% 2.8pp Operating
Slide 32: Consolidated Statements of Comprehensive Loss
Consolidated Statements of Comprehensive Loss Consolidated Statements of Comprehensive Loss (Amounts expressed in thousands of Turkish lira (TRY) in terms of the purchasing power of the TRY at 31 December 2023 unless otherwise indicated.) Twelve Months Ended Three Months Ended unaudited unaudited un
Slide 33: Consolidated Balance Sheets
Consolidated Balance Sheets Consolidated Balance Sheets (Amounts expressed in thousands of Turkish lira (TRY) in terms of the purchasing power of the TRY at 31 December 2023 unless otherwise indicated.) unaudited unaudited Assets: 31 December 2023 31 December 2022 Cash and cash equivalents 5,500,000
Slide 34: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (Amounts expressed in thousands of Turkish lira (TRY) in terms of the purchasing power of the TRY at 31 December 2023 unless otherwise indicated.) (unaudited) (unaudited) 1 January – 31 December 2023 1 January – 31 December
Slide 35: Non-IFRS Metrics Reconciliation (I/V)
Non-IFRS Metrics Reconciliation (I/V) EBITDA (TRY million) Three months ended December 31, Twelve months ended December 31, 2023 2022 2023 2022 Net income/ (loss) for the period (644.1) (912.4) 75.5 (4,790.7) Taxation on income 0.0 0.0 0.0 0.0 Financial income 763.9 339.8 3,539.6 3,153.2 Financial e
Slide 36: Non-IFRS Metrics Reconciliation (II/V)
Non-IFRS Metrics Reconciliation (II/V) IAS 29-Unadjusted EBITDA (TRY million) Three months ended December 31, Reversal of IAS 29 Reversal of IAS 29 IAS 29 Unadjusted IAS 29 Unadjusted 2023 Adjustment 2023 2022 Adjustment 2022 Net loss for the period (644.1) (312.7) (331.4) (912.4) (558.8) (353.6) Ta
Slide 37: Non-IFRS Metrics Reconciliation (III/V)
Non-IFRS Metrics Reconciliation (III/V) IAS 29-Unadjusted EBITDA (TRY million) Twelve months ended December 31, Reversal of IAS 29 Reversal of IAS 29 2023 IAS 29 Unadjusted 2022 IAS 29 Unadjusted Adjustment Adjustment 2023 2022 Net income/(loss) for the period 75.5 (653.6) 729.1 (4,790.7) (3,566.1)
Slide 38: Non-IFRS Metrics Reconciliation (IV/V)
Non-IFRS Metrics Reconciliation (IV/V) REVENUE (TRY million) Three months ended December 31, Twelve months ended December 31, 2023 2022 2023 2022 Revenue 11,811.9 9,120.5 35,558.5 26,478.0 Reversal of IAS 29 adjustment 406.1 3,673.7 6,265.6 12,435.8 IAS 29-Unadjusted Revenue 11,405.8 5,446.8 29,292.
Slide 39: Non-IFRS Metrics Reconciliation (V/V)
Non-IFRS Metrics Reconciliation (V/V) Free Cash Flow (TRY million) Three months ended December 31, Twelve months ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities 3,183.6 2,130.9 5,019.1 706.8 Capital expenditures (328.0) (385.3) (1,153.7) (1,393.1) Proceeds from the s
Slide 40: Certain Definitions
Certain Definitions We provide a number of key operating performance indicators used by our management and often used by competitors in our industry. We define certain terms used in this presentation as follows: GMV as gross merchandise value which refers to the total value of orders/products sold
D-Market Electronic Services & Trading (Hepsiburada) — Q4 2023 Earnings Presentation on 6ix