D-MARKET Elektronik Hizmetler ve Ticaret AS · NASDAQ:HEPS
D-MARKET Elektronik Hizmetler ve Ticaret AS — D-Market Electronic Services & Trading (Hepsiburada) — Q4 2022 Earnings Presentation
43 slides from D-MARKET Elektronik Hizmetler ve Ticaret AS's earnings presentation, Mar 22, 2023
Slide 1: Q4/ Full Year 2022 Results Presentation
Q4/ Full Year 2022 Results Presentation March 22, 2023
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
hepsiburada Business Update
Slide 5: 2022: Year Ends With Solid Results
2022: Year Ends With Solid Results IAS 29-Unadjusted GMV IAS 29-Unadjusted EBITDA IAS 29-Unadjusted EBITDA Growth as a % GMV as a % GMV 81% YoY Guidance -2.1%in 2022 Guidance exceeded -0.04%in Q4 2022 exceeded nearly breakeven level +3.8pp YoY real growth(1) +4.4pp YoY improvement for the quarter To
Slide 6: Strong Value Proposition Increasing Customer Base and Frequency
Strong Value Proposition Increasing Customer Base and Frequency Solid Value Proposition for Customers Active Customers(1) Super Convenience with Delivery Services • ~83% of 1P orders delivered by HJ arrived next day(4) Q4’22 • ~56% of total returns picked-up at customers’ address by HJ(5) 11.3M 12.2
Slide 7: Solid Merchant Growth Through Comprehensive Services
Solid Merchant Growth Through Comprehensive Services End-to-End Solutions Partner for Merchants Active Merchants(1) Logistics services Q4’22 • ~60% of total 3P volume delivered by HJ in 2022(3) • ~40% of oversized products in 3P delivered by HJ XL in Q4’22(4) 75.0K 99.7K 33% YoY • 7 DCs(5) providing
Slide 8: Our Core Priorities
Our Core Priorities 1 2 Win via loyalty rather than reliance on one- Clear differentiation with best-in class timers and streamline marketing and affordability solutions and high-quality promotions strategy service levels on our platform 3 4 Offer best in class payment, lending & last Promote profit
Slide 9: Win With Loyalty
1 Win With Loyalty Hepsiburada Premium Members Reduce and optimize advertising spending, focusing on retention Hepsiburada Premium: A wide range of benefits including free delivery, cashback, free access to an on-demand streaming service 840 Higher frequency post joining the program 615 HB Pre
Slide 10: Clear Sustainable Strategic Differentiators
2 Clear Sustainable Strategic Differentiators Multiple Payment Options Win with affordability solutions leveraging Affordability Solutions GMV Penetration(1) in-house fintech capabilities (only e-retailer Secure Payment Delivery options with this license and first in market BNPL Saved Addresses so
Slide 11: Competitive Edge In Affordability Solutions Through Hepsipay
2 Competitive Edge In Affordability Solutions Through Hepsipay Hepsipay Wallet Affordability Solutions Wallet Base(1) TPV as a % Affordability of GMV Solutions (2)Penetration(3) GMV 112.8% (Millions) (%) 3.9% 11.0 9.2 8.0 7.1 5.2 0.6% Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Throu
Slide 12: Hepsipay En Route To Becoming A Leading Fintech Player
2 Hepsipay En Route To Becoming A Leading Fintech Player Addressable market, 2022 Key Milestones in 2022 Upcoming in 2023 and Beyond • Wallet redesigned and re-launched with new features, enhanced Enhancement of • In-house consumer finance solution (Hepsifinans) security and new top-up channels affo
Slide 13: Superior NPS with HepsiJet Services
2 Superior NPS with HepsiJet Services HJ - % Parcel Volume in 3P(1) HJ - % Total Parcels Delivered(2) 60% 65% Flexible delivery with options such as 50% postpone delivery, change address while en 43% route etc. 27% 16% FY’20 FY’21 FY’22 FY’20 FY’21 FY’22 Convenience with return-pick at customer’
Slide 14: Promote profitability through a prioritized focus
3 Promote profitability through a prioritized focus Increase share of non-electronics in GMV Optimization of HR through automation in processes Cut-back non-profitable businesses without path to profitability Q4 & FY 2022 Results 14
Slide 15: Offer payment, lending & last mile services to other retailers
4 Offer payment, lending & last mile services to other retailers High quality last-mile delivery with increased value added services and oversized cargo delivery (XL) Advantage of economies of scale Scale third-party business through targeting all e-commerce players Improved operational efficien
Slide 16: Path to Profitability Through Focusing On Our Priorities
Path to Profitability Through Focusing On Our Priorities IAS29-Unadjusted EBITDA as a % of GMV 1. Optimization of marketing and customer loyalty -0.5% 2. Affordability and service on-Platform Building Blocks -2.1% on Path to Profitability 16,081 (2.1%) 3. Opex and Gross Contribution improvement 4. H
Slide 17: Addressing the Disaster of 2023
Addressing the Disaster of 2023 Earthquake Region Recovery Actions Taken by Hepsiburada • Immediate recovery actions • Sale of aid goods, prepaid cards facilitating donations • Managing warehouses, logistics teams and mobilizing ~1,500 volunteer employees to support the region • Advanced our payment
Slide 18: Q1 2023 Outlook
Q1 2023 Outlook • Despite the impact of the earthquake disaster, we expect to deliver a quarterly breakeven EBITDA(1) Q1 2023 • ~70% GMV(1) growth compared to Q1 2022 (expected to be above 12-month inflation rate of 55% as at February 2023) In 2023, we intend to remain focused on sustainable GMV gro
Slide 19: Financial Performance
hepsiburada Financial Performance
Slide 20: Q4 2022: Strong Performance Across All Key Metrics
Q4 2022: Strong Performance Across All Key Metrics IAS 29-Unadjusted IAS 29-Unadjusted IAS 29-Unadjusted IAS 29-Unadjusted GMV Revenue Gross Contribution EBITDA TRY 19.1Bn TRY 5.4Bn 9.2% of GMV -0.04% of GMV 104% YoY 97% YoY +2.1 pp YoY +8.0 pp YoY GMV Revenue Gross Contribution EBITDA TRY 19.4Bn TR
Slide 21: Path to Profitability: Consistent Progress in Q4
Path to Profitability: Consistent Progress in Q4 Solid revenue growth with stable gross contribution margin in a rising inflationary environment and… Revenue (TRY billion) +6.8% Gross Contribution % of GMV 15.0 16.1 +2.5pp +0.2pp +9.7% 7.8% 6.2% 6.5% 5.4% 5.0 5.5 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 FY’21
Slide 22: FY 2022: Real Growth in GMV and Rise in Share of Non-Electronics
FY 2022: Real Growth in GMV and Rise in Share of Non-Electronics GMV Breakdown Mobile (TRY Billion) 1P GMV (TRY Billion) Non-Electronics GMV Appliances 3P GMV Electronics GMV Technology Books & Hobbies +4% Elec-non elec Supermarket Home & Garden 54 grafik 54 Fashion & Lifestyle 52 52 Other (1) 2% 9%
Slide 23: FY 2022: Real Top-line Growth And Margin Improvement
FY 2022: Real Top-line Growth And Margin Improvement IAS 29-UNADJUSTED REVENUE IAS 29-UNADJUSTED GROSS CONTRIBUTION IAS 29-UNADJUSTED EBITDA TRY billion % of GMV 9.0% 7.1% 9.0% % of GMV -0.5% -6.5% -2.1% +85.8% +130.6% -40.9% 14.0 TRY billion TRY billion +18.5% 4.3 -0.1 +21.1% 7.6 6.4 1.5 1.8 -1.0 -
Slide 24: Defending Gross Contribution Margin In A High Inflationary Environment
Defending Gross Contribution Margin In A High Inflationary Environment Revenue Breakdown and Bridge Gross Contribution Performance Revenue Average Inflation Rates(2) Gross Contribution Margin 2021 2022 (TRY Million) IAS 29-Unadjusted Gross Contribution Margin 20% 72% Gross Contribution Margin 9.8% +
Slide 25: Improvement in Operating Expenses
Improvement in Operating Expenses Operating Expenses as a % of GMV -6.0pp 15.1% -2.2pp Shipping and 14.2% 13.4% Packaging 3.4% 3.1% 3.7% 11.3% 3.3% 9.1% 3.0% Advertising 7.2% 2.6% 5.7% 3.3% 5.4% 2.6% 4.5% 3.3% 3.7% G&A(1) 3.9% one-off 2.4% one-off impact 1.2% 0.4% 0.5% impact Impact of the Q4’21 Q3’
Slide 26: Continued Progress in EBITDA
Continued Progress in EBITDA EBITDA as a % of GMV Bridge EBITDA as a % of GMV Shipping and Payroll and Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 EBITDA Gross Advertising packaging outsource Other EBITDA -0.0% % of GMV contribution exp. exp. staff exp. OPEX(1) % of GMV TRY (7.3) million -1.3% TRY (245.9) million
Slide 27: Free Cash Flow Flat in 2022 With Higher Cash Generation Compensating for Higher Capex
Free Cash Flow Flat in 2022 With Higher Cash Generation Compensating for Higher Capex Free Cash Flow(1) Cash Flow From Operating Activities TRY million TRY million 1,059 1,293 231 357 476 584 429 -191 -80 -29 -418 -416 -2,064 -1,924 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 FY’21 FY’22 Q4’21 Q1’22 Q2’22 Q3’22 Q
Slide 28: Q&A
hepsiburada Q&A
Slide 29: Appendix
Appendix Consolidated Financial Statements Presentation of Financial and Other Information
Slide 30: Summary Financials
Summary Financials (unaudited) (unaudited) (unaudited) (unaudited) TRY million Q4’22 Q4’21 Q4 YoY FY’22 FY’21 FY YoY Revenue 5,535.2 5,044.7 9.7% 16,069.4 15,046.2 6.8% Gross Contribution 1,521.4 918.5 65.6% 3,492.1 3,249.7 7.5% Gross Contribution margin(1) 7.8% 5.4% 2.5pp 6.5% 6.2% 0.2pp Operating
Slide 31: 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 2022 unless otherwise indicated.) Twelve Months Ended Three Months Ended unaudited unaudited un
Slide 32: 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 2022 unless otherwise indicated.) unaudited unaudited(1) Assets: 31 December 2022 31 December 2021 Cash and cash equivalents 5,266,
Slide 33: 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 2022 unless otherwise indicated.) Unaudited Unaudited 1 January - 31 December 2022 1 January - 31 December 2021
Slide 34: 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, 2022 2021 2022 2021 Net gain/(loss) for the period (546.1) 588.8 (2,899.8) (2,021.0) Taxation on income 0.0 0.0 0.0 0.0 Financial income 206.2 3,641.9 1,913.6 4,024.3 Financial
Slide 35: Non-IFRS Metrics Reconciliation (II/V)
Non-IFRS Metrics Reconciliation (II/V) EBITDA (TRY million) Three months ended December 31, Reversal of IAS 29 Reversal of IAS 29 2022 IAS 29 Unadjusted 2021 IAS 29 Unadjusted Adjustment 2022 Adjustment 2021 Net gain/(loss) for the period (546.1) (200.0) (346.0) 588.8 (50.9) 639.7 Taxation on income
Slide 36: Non-IFRS Metrics Reconciliation (III/V)
Non-IFRS Metrics Reconciliation (III/V) EBITDA (TRY million) Twelve months ended December 31, Reversal of IAS 29- Reversal of IAS 29- 2022 IAS 29 Unadjusted 2021 IAS 29 Unadjusted Adjustment 2022 Adjustment 2021 Net loss for the period (2,899.8) (1,682.8) (1,217.0) (2,021.0) (1,320.9) (700.1) Taxati
Slide 37: 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, 2022 2021 2022 2021 Revenue 5,535.2 5,044.7 16,069.4 15,046.2 Reversal of IAS 29 adjustment 88.4 2,285.6 2,027.2 7,488.2 IAS 29-Unadjusted Revenue 5,446.8 2,759.1 14,042.2 7,
Slide 38: 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, 2022 2021 2022 2021 Net cash provided by /(used in) operating activities 1,293.0 (80.4) 428.7 (28.8) Capital expenditures (233.6) (112.0) (845.1) (391.5) Proceeds from
Slide 39: 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
Slide 40: GMV (FY'22)
GMV (FY’22) GMV Breakdown and Bridge GMV 4% YoY (TRY Billion) IAS29 adjustment +6.6Bn 53.9 GMV FY'21 52.0 47.3 18.0 13.9 15.7 26.2 7.3 8.4 36.0 31.6 17.8 IAS 29-Unadjusted Sales of Goods (1P) Marketplace (3P) IAS 29-Unadjusted GMV FY’22 GMV FY’21 GMV FY’22 1P 3P See “Certain Definitions” in the Appe
Slide 41: Revenue (FY'22)
Revenue (FY’22) Revenue Breakdown and Bridge Revenue 7% YoY (TRY Million) IAS29 adjustment +2,027Mn 16,069 15,046 296 14,042 1,487 Revenue FY'21 566 183 265 1,702 894 1,307 1,495 7,558 4,840 14,042 82 740 601 12,584 10,975 6,134 IAS 29-Unadjusted Sales of Marketplace (3P) Delivery Service Other IAS
Slide 42: GMV (Q4'22)
GMV (Q4’22) GMV Breakdown and Bridge GMV 14% YoY (TRY Billion) IAS29 adjustment +0.3Bn 17.0 19.1 19.4 GMV Q4'21 6.1 6.2 6.9 2.9 9.4 3.2 13.0 13.2 6.1 IAS 29-Unadjusted Sales of Goods (1P) Marketplace (3P) IAS 29-Unadjusted GMV Q4’22 GMV Q4’21 GMV Q4’22 1P 3P See “Certain Definitions” in the Appendix
Slide 43: Revenue (Q4'22)
Revenue (Q4’22) Revenue Breakdown and Bridge Revenue 10% YoY (TRY Million) IAS29 adjustment +88Mn 5,447 5,535 5,045 84 122 124 293 514 522 344 Revenue Q4'21 572 563 1,967 2,759 5,447 38 221 219 4,248 4,317 2,281 IAS 29-Unadjusted Sales of Marketplace (3P) Delivery Service Other IAS 29-Unadjusted Rev
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