D-Market Elektronik Hizmetler ve Ticaret A.S. Q3 FY2024 earnings call

Milestones

• First quarterly positive operating income since IPO in IFRS financials.

Strategic Priorities

• Loyalty Driver: Hepsiburada premium program reached nearly 3.7 million members by November, with premium members' monthly order frequency up 31%. Held Premium Days in July with 130 million visits and 4 million products ordered.
• Logistic Capabilities: HepsiJet delivered 74% of total parcels, off-platform volume doubled. Launched renew your mobile at your doorstep product in 81 Turkish cities.
• Landing Solutions: BNPL volume more than tripled YoY in Q3, Q3 share in GMV rose to 8.8%. Hepsipay had 17.6 million wallet customers and 127 key retailers using pay with Hepsipay.
• November Performance: Recorded highest daily traffic on Single’s Day, 500 million visits in November.

In the third quarter, Hepsiburada achieved 10.3% GMV growth. The first nine months saw 17.4% GMV growth adjusted for inflation. Active customers grew by 233,000 to 12.3 million. The loyalty program scaled to nearly 3.7 million members by November. There were 32 million orders in Q3, a 19% year-on-year growth. Order frequency over the past 12 months reached 10.8, up by 16%. The active merchant base was almost 100,000, and SKUs expanded by 33% to 280 million.

• Full year GMV growth expected ~75%, roughly 13% adjusted for inflation vs 2023.
• Q4 GMV guidance 50%-55% growth.
• Q4 EBITDA as % of GMV guided 1.8%-2%, full year ~2.2%.

• Macroeconomic pressures affecting purchasing power.
• Regulatory changes like Turkish government's two-factor authentication impacting merchant numbers.
• Actual results may differ materially from forward-looking statements.

Q: Could you please clarify the 1.2% EBITDA in Q3 actually compared to 2.2% guided in September?

A: The difference is between adjusted and unadjusted numbers; Q3 result is in line with unadjusted guidance provided.

Q: What are your plans to insource your fintech segment through the help of Kaspi as in stop securitizing or outsourcing to banks?

A: Continue offering widest spectrum of services with BNPL and Hepsiburada finance loan through own P&L, and shopping loans/GPS from banks; no plan for change unless new news arises.

Q: What are your plans to insource your fintech segment through the help of Kaspi as in stop securitizing or outsourcing to banks?

A: Continue offering widest spectrum of services with BNPL and Hepsiburada finance loan through own P&L, and shopping loans/GPS from banks; no plan for change unless new news arises.

Q: The cash outflow from early collection of credit card receivables is higher than EBITDA. When do you expect EBITDA CC commissions to turn positive?

A: As overall interest rates decrease gradually with inflation, EBITDA minus credit card costs will turn positive next year.