D-MARKET Elektronik Hizmetler ve Ticaret AS · NASDAQ:HEPS
D-MARKET Elektronik Hizmetler ve Ticaret AS — D-Market Electronic Services & Trading (Hepsiburada) — Q1 2023 Earnings Presentation
40 slides from D-MARKET Elektronik Hizmetler ve Ticaret AS's earnings presentation, May 25, 2023
Slide 1: Q1 2023 Results Presentation
Q1 2023 Results Presentation May 25, 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: Q1 2023 Highlights: Solid Performance and Milestones Reached
Q1 2023 Highlights: Solid Performance and Milestones Reached IAS 29-Unadjusted GMV IAS 29-Unadjusted EBITDA IAS 29-Unadjusted Gross Growth as a % GMV Contribution as a % GMV(2) 78% YoY 1.2% 10.5% +15.1% YoY inflation-adjusted growth(1) +4.8pp YoY +2.2pp YoY Total Orders Frequency Market Leader in NP
Slide 6: Q1 2023 Guidance: Breakeven Guidance Surpassed on Positive EBITDA
Q1 2023 Guidance: Breakeven Guidance Surpassed on Positive EBITDA Guidance Actual GMV(1) Growth ~70% 78% EBITDA(1) Break-even TRY 176 million 1.2% as a % of GMV (1): Figures are based on IAS 29-Unadjusted GMV and IAS 29-Unadjusted EBITDA figures. Q1 2023 Results 6
Slide 7: Customer Frequency and Engagement: Continued Rise Fuels Sustainable Growth
Customer Frequency and Engagement: Continued Rise Fuels Sustainable Growth (LTM) Active Customers(1) (Order) Frequency(3) Q1’22 Q1’23 Q1’22 Q1’23 11.98M 11.94M 4.9 7.5 nearly flat YoY 52% YoY Monthly Active Customers(2) Total Orders(4) Two major earthquakes • ~14M people affected on Feb 6th by the e
Slide 8: Our Merchants: Digitizing E-Commerce
Our Merchants: Digitizing E-Commerce Earthquake Disaster – Our Support for Our Merchants Active Merchants(1) • 6.5K merchants in the earthquake zone Q1’22 Q1’23 • 1,950 merchants temporarily closed their stores 82.9K 100.7K • Advanced due payments in February 21% YoY • Prioritized fulfillment servic
Slide 9: Our Strategy Recapped: Executing Diligently On The Priorities
Our Strategy Recapped: Executing Diligently On The Priorities 1 2 Clear differentiation with affordability & Win with customer loyalty and optimize lending solutions as well as high-quality marketing and advertising spend service levels on our platform and superior delivery services 3 4 Offer best i
Slide 10: Win with Customer Loyalty: HB Premium Program Hits 1M Members
1 Win with Customer Loyalty: HB Premium Program Hits 1M Members Building Loyalty Driving Retention & Efficiency Hepsiburada Premium Members • Program that enables reduced advertising spend (Thousands) • Higher frequency generation upon joining the program HB Premium Program – Order Frequency (Q1’23)
Slide 11: Win with Customer Loyalty: HB Premium Program with a Strong Offering
1 Win with Customer Loyalty: HB Premium Program with a Strong Offering HB Premium Benefits Strong Satisfaction • Compelling value at TRY14.90/month (~$0.75) Net Promoter Score (NPS)(2) – March 2023 • A wide range of benefits(1) Free shipment 87 3% cashback Blutv membership 75 Discounted furn
Slide 12: Differentiated by Affordability Solutions: HepsiPay
2 Differentiated by Affordability Solutions: HepsiPay Offering Multiple Payment Options Fintech Advantage Secure Payment Delivery options Saved Addresses • In-house Fintech strength: Win with affordability Add New Address solutions Hepsiburada Check-Out Page Payment options • Unique licensing advant
Slide 13: Differentiated by Affordability Solutions: Solid Progress in KPIs
2 Differentiated by Affordability Solutions: Solid Progress in KPIs Hepsipay Wallet Affordability Solutions Wallet Base(1) TPV as a % of Affordability GMV(2) Solutions GMV Penetration(3) (Millions) (%) 66% 11.8 Through Non-card Affordability Solutions 5.8% 11.0 9.2 8.0 7.1 3.9% 2.3% Q1’22 Q2’22 Q3’2
Slide 14: Differentiated by Services: Superior Delivery Services with HepsiJet
2 Differentiated by Services: Superior Delivery Services with HepsiJet TPV as a % of GMV(2) HepsiJet Net Promoter Score (NPS)(1) Flexible Delivery Options with HepsiJet • Next-Day Delivery • Same Day & Scheduled Next-Day Delivery 89.9 • Return Pick-Up Services From Customer’s Address 87.9 • Parcel L
Slide 15: Differentiated Services: Solid Progress in KPIs
2 Differentiated Services: Solid Progress in KPIs TPVFast as a and GMV(2) Service Through HepsiJet % of Reliable TPV asHJ a -%% of GMV Total (2) Delivered (2) Parcels +5.5pp HJ - % Next Day Delivery(1) 66% 63% 58% +2.5pp 84% 84% 81% Q1’22 Q4’22 Q1’23 HJ XL- % Orders Delivered (3) +36.6pp 58% 60% 23%
Slide 16: Pursuing Profitability: Positive EBITDA Achieved in Q1 2023
Pursuing Profitability: 3 Positive EBITDA Achieved in Q1 2023 Frugal Approach in Opex EBITDA Breakeven in Q1 2023 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Opex(1) as a % of GMV 1.2% TRY 175.9 million 0.0% TRY 7.3 million +2.7pp 0.05% -1.3% -2.7% -3.7% 1.2% -9.1% -9.3% IAS 29-Unadjusted -4.2% EBITDA % of GMV -1
Slide 17: Moving Off-Platform with our Logistics and Fintech Services: HepsiJet
Moving Off-Platform with our Logistics and Fintech Services: 4 HepsiJet HepsiJet Serves Third Parties HJ - % Volume of External Customers(1) +2.8pp 22.1% 19.3% Q4’22 Q1’23 (1): Share of volume from other retailers’ operations delivered by HepsiJet within HepsiJet’s total volume delivered. Q1 2023 Re
Slide 18: Moving Off-Platform with our Logistics and Fintech Services: Hepsipay
Moving Off-Platform with our Logistics and Fintech Services: 4 Hepsipay Hepsipay Top-up to Wallet New Features with Consumer Loan Live Live post Q1 2023 5,500 TL loan available at your • Hepsipay debit card to be used both in physical and online Hepsipay account. Spend as you wish. transactions • QR
Slide 19: Q2 2023 Outlook: Building on a Robust Start to the Year
Q2 2023 Outlook: Building on a Robust Start to the Year • ~95% GMV(1) growth compared to Q2 2022 Q2 2023 • EBITDA (1) as a % of GMV within the range of 0.5% to 1.0% In 2023, we intend to remain focused on sustainable GMV growth and our path to profitability with a prudent approach to capital allocat
Slide 20: Financial Performance
Financial Performance Q1 2023 Results
Slide 21: Q1 2023: Robust Performance Across All Key Metrics
Q1 2023: Robust Performance Across All Key Metrics IAS 29-Unadjusted IAS 29-Unadjusted IAS 29-Unadjusted IAS 29-Unadjusted GMV Revenue Gross Contribution(1) EBITDA TRY 14.8Bn TRY 4.5Bn 10.5% of GMV 1.2% of GMV 78% YoY 79% YoY +2.2 pp YoY +4.8 pp YoY 24.1M Orders with 61% YoY Growth (1): IAS 29-Unadj
Slide 22: Q1 2023: Robust Performance Across All Key Metrics (cont.)
Q1 2023: Robust Performance Across All Key Metrics (cont.) Adjusted for Inflation GMV Revenue Gross Contribution EBITDA TRY 15.1Bn TRY 4.6Bn 9.3% of GMV 0.05% of GMV 15% YoY 16% YoY +5.6 pp YoY +8.3 pp YoY 24.1M Orders with 61% YoY Growth Note: See “Certain Definitions” in the Appendix of this prese
Slide 23: Path to Profitability: Consistent Progress
Path to Profitability: Consistent Progress Solid revenue growth with continued rise in gross contribution margin in high inflationary environment and… Revenue (TRY billion) Gross Contribution % of GMV +15.8% +5.6pp 4.6 9.3% 4.0 3.7% Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 …substa
Slide 24: GMV: Solid Growth and Rise in Share of Non-Electronics
GMV: Solid Growth and Rise in Share of Non-Electronics Solid Operational KPIs.. …resulting in strong GMV growth Number of Orders (TRY Billion) 1P GMV (TRY Billion) Non-Electronics GMV (millions) 61% Electronics GMV 3P GMV 9% 24 excl. digital products +15% 15 15.1 15.1 13.1 13.1 32% 43% Q1’22 Q1’23 3
Slide 25: Revenue and Gross Contribution Margin: Continued Momentum
Revenue and Gross Contribution Margin: Continued Momentum in A High Inflationary Environment Revenue Breakdown and Bridge Gross Contribution Performance Revenue Gross Contribution Margin (TRY Million) IAS 29-Unadjusted Gross Contribution Margin Gross Contribution Margin 10.5% +15.8% 9.8% 4,629 9.2%
Slide 26: EBITDA Performance: Reaching Positive EBITDA in Q1 2023
EBITDA Performance: Reaching Positive EBITDA in Q1 2023 EBITDA as a % of GMV Bridge EBITDA as a % of GMV Shipping Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 and Payroll and 1.2% EBITDA Gross Advertising packaging outsource Other EBITDA TRY 175.9 million % of GMV contribution exp. exp. staff exp. OPEX(1) % of GMV
Slide 27: Free Cash Flow: Improved Significantly YoY With Higher Cash Generation
Free Cash Flow: Improved Significantly YoY With Higher Cash Generation Free Cash Flow(1) Cash Flow From Operating Activities TRY million 1,192 TRY million 1,455 0.4% 402 536 657 260 60 -154 -2,165 -16.5% -2,322 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 % of GMV CAPEX Change in Net
Slide 28: Q1 2023: Key Takeaways
Q1 2023: Key Takeaways 1 The highest EBITDA since IPO at TRY 176 M, exceeding guidance for Q1 2023 2 Strong execution on our well-defined priorities, delivering results 5.6pp improvement in Gross Contribution and 8.3pp rise in EBITDA as 3 % of GMV Positive cash flow from operations, resulting in sub
Slide 29: Q&A
hepsiburada Q&A Q1 2023 Results
Slide 30: Appendix
Appendix Consolidated Financial Statements Presentation of Financial and Other Information
Slide 31: Summary Financials
Summary Financials (unaudited) (unaudited) (unaudited) TRY million Q1’23 Q4’22 Q1’22 YoY QoQ Revenue 4,629.5 6,228.3 3,997.4 15.8% (25.7%) Gross Contribution 1,409.1 1,711.8 490.4 187.4% (17.7%) Gross Contribution margin(1) 9.3% 7.8% 3.7% 5.6pp 1.5pp Operating Expenses(2) (Opex) (4,800.2) (6,712.7)
Slide 32: Operating Expenses
Operating Expenses Operating Expenses as a % of GMV -2.7pp 12.0% Shipping and Packaging 3.6% 9.1% 9.3% 2.6% 2.9% Advertising 3.9% 2.6% 1.9% G&A(1) 4.5% 4.5% 3.9% Q1’22 Q4’22 Q1’23 Note: Totals may differ due to rounding. (1): Includes payroll and outsource staff expenses, technology expenses, other
Slide 33: 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 March 2023 unless otherwise indicated.) unaudited unaudited 1 January - 1 January – 31 March 2023 31 Mar
Slide 34: 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 March 2023 unless otherwise indicated.) unaudited audited Assets: 31 March 2023 31 December 2022 Cash and cash equivalents 4,971,751 5,925,3
Slide 35: 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 March 2023 unless otherwise indicated.) Unaudited Unaudited 1 January - 31 March 2023 1 January - 31 March 2022 Loss bef
Slide 36: Non-IFRS Metrics Reconciliation (I/IV)
Non-IFRS Metrics Reconciliation (I/IV) EBITDA (TRY million) Three months ended March 31, 2023 2022 Net loss for the period (192.8) (1,220.0) Taxation on income - - Financial income 161.6 701.8 Financial expenses (312.0) (489.9) Depreciation and amortization (177.9) (123.9) Monetary gains/(losses) 12
Slide 37: Non-IFRS Metrics Reconciliation (II/IV)
Non-IFRS Metrics Reconciliation (II/IV) IAS 29-Unadjusted EBITDA (TRY million) Three months ended March 31, Reversal of IAS 29 Reversal of IAS 29 2023 IAS 29 Unadjusted 2022 IAS 29 Unadjusted Adjustment 2023 Adjustment 2022 Net loss for the period (192.8) (112.7) (80.1) (1.220,0) (980.3) (239.7) Tax
Slide 38: Non-IFRS Metrics Reconciliation (III/IV)
Non-IFRS Metrics Reconciliation (III/IV) REVENUE (TRY million) Three months ended March 31, 2023 2022 Revenue 4,629.5 3,997.4 Reversal of IAS 29 adjustment 96.0 1,469.4 IAS 29-Unadjusted Revenue 4,533.5 2,528.0 GROSS CONTRIBUTION (TRY million) Three months ended March 31, Reversal of IAS 29 IAS 29-U
Slide 39: Non-IFRS Metrics Reconciliation (IV/IV)
Non-IFRS Metrics Reconciliation (IV/IV) Free Cash Flow (TRY million) Three months ended March 31, 2023 2022 Net cash provided by /(used in) operating activities 60.2 (2,164.9) Capital expenditures (215.1) (157.1) Proceeds from the sale of property and equipment 1.0 0.1 Free Cash Flow (153.9) (2,322.
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
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