NASDAQ:HEPS D-Market Elektronik Hizmetler ve Ticaret A.S. Q2 2023 Earnings Report $2.49 -0.09 (-3.57%) Closing price 03:59 PM EasternExtended Trading$2.48 0.00 (-0.12%) As of 07:36 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast D-Market Elektronik Hizmetler ve Ticaret A.S. EPS ResultsActual EPS$0.13Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AD-Market Elektronik Hizmetler ve Ticaret A.S. Revenue ResultsActual Revenue$284.78 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AD-Market Elektronik Hizmetler ve Ticaret A.S. Announcement DetailsQuarterQ2 2023Date8/24/2023TimeN/AConference Call DateThursday, August 24, 2023Conference Call Time9:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by D-Market Elektronik Hizmetler ve Ticaret A.S. Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 24, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. I am Gaele, your Chorus Call operator. Welcome and thank you for joining the HEPSI PURRATA conference call and Live Webcast to Present and Discuss the Second Quarter 2023 Financial Results. All participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Operator00:00:26Star and 0 on your telephone. At this time, I would like to turn the conference over to Ms. Nilhan Upteikim, CEO Mr. Corhan Oz, CFO and Ms. Helene Selig Pelik, Investor Relations Director. Operator00:00:39Ms. Selig Pelik, you may now proceed. Speaker 100:00:42Thanks, operator. Thank you for joining us today for HebsiBorada's Q2 2023 earnings call. I'm pleased to be joined on the call today by our CEO, Niran Onal Gokcetykin and our CFO, Korhan Oz. The following discussion, including responses to your Questions reflect management's views as of today's date only. We undertake no obligation to update or revise this information except as required by law. Speaker 100:01:08Certain statements made on today's call are forward looking statements and actual results may differ materially from these forward looking statements. Please refer to today's earnings release as well as the risk factors described in the Safe Harbor slide of today's supplemental slide deck, today's press release, the 6 ks, our Form 20 F filed with the SEC on May 1, 2023, and other SEC filings for informational factors that could cause our Actual results to differ materially from these forward looking statements. Also, we will reference certain non IFRS measures during today's call. Please refer to the appendix of our supplemental slide deck as well as today's press release for a presentation of the most directly comparable IFRS measure and the relevant IFRS to non IFRS reconciliation. As a reminder, a replay of this call will be available on our Investor Relations website. Speaker 100:01:58With that, I will hand it over to our CEO, Niran. Speaker 200:02:01Thank you, Helen. Welcome, everyone, and thank you so much for joining us. I'm really pleased to be with you today and to to present our quarterly progress. In a quarter of continued tough macroeconomic conditions and uncertainties Throughout the election process, we doubled our GMV year over year and improved our profitability margin. Our robust performance exceeded our quarterly guidance, thanks to our operational agility. Speaker 200:02:30A staggering 77,500,000 orders On a 94.6 percent rise over Q2 'twenty two resulted in strong GMV growth. This was achieved through our attractive customer and merchant value proposition and compelling services. Our focus on profitability led to a notable 10.4% gross contribution margin, which is 200 bps year over year. This metric underscores our strategic actions of lowering promotion spending, growing the share of nonelectronics and marketplace operations in the GMV mix. Furthermore, our EBITDA as percentage of GMV reached an impressive 2% is plus 4.70 basis points year over year. Speaker 200:03:22This is achieved through effective OpEx management. Excluding the one off provision reversal, 1.5 percent EBITDA still exceeded our quarterly guidance. Meanwhile, we remain Turkey's foremost e commerce place in NPS with our exceptional customer service, top notch logistics services and diverse affordability solutions. With over 1,300,000 members, Hepse Puroda Premium is on track to contribute to order frequency and customer retention. Overall, our 2nd quarter results are characterized by solid growth and higher profitability. Speaker 200:04:06It is worth spending another minute on this quarter's guidance performance. Our GMV growth of 101% outpaced our guidance of around 95%. Strong growth coupled with diligent cost management resulted in an EBITDA as percentage of GMV at 2%. This 0.5 percentage points higher than the upfront of the guidance excluding the one off. Our performance validates the effectiveness of our strategies for driving sustained profitable growth. Speaker 200:04:43Our active customer base reached 12,000,000 with more than 300,000 drives during the quarter. With the 77,500,000 orders, the order frequency reached 8.1, marking 57% growth year on year for the quarter. We continue to invest in our technology. Coupled with our outstanding service quality. This suggests the potential for higher customer engagement on our platform. Speaker 200:05:13Next slide, please. We greatly value our wide merchant base. They benefit from our full array of services, including fulfillment, logistics and advertising solutions and enjoy greater efficiency while working with us. In the second quarter, our active merchant base exceeded 101,000 merchants, and total SKUs rose by 50% year on year to nearly 195,000,000 We continue to invest in our in house merchant application that facilitates proactive campaign and ad management and customer communication, among many other capabilities. Our merchant ad has a solid rating at the store, and its ease of use increases the merchant appreciation of hep C. Speaker 200:06:03BURRADEA. Next slide please. As ever, we diligently execute on our priorities. Our results confirm a solid execution of our strategy. We maintain our competitive edge, grow sustainably and profitably as seen in our numbers. Speaker 200:06:22So let me recap on our strategy, which I shared earlier this year. Firstly, hep C. BURRATA premium program, The key to increasing customer loyalty is advancing its plan. We welcome the rising share of program numbers in our total orders. Secondly, we cultivate sustainable differentiators such as affordability solutions, excellent platform and delivery services that effectively benefit our customers. Speaker 200:06:51Thirdly, our efforts to streamline costs and FineTune core operations are well on track. This is reinforced by our progress in the quarter. Last but not least, our logistics services and fintech solutions for 3rd party continue to generate additional revenue streams, while supporting the growth of Turkey's total retail market. Next, take a A closer look at the fundamentals of our Hepse Puroda premium program, which marked its 1st anniversary in July. Through a net addition of 500,000 in the first half of the year, total program numbers reached 1,300,000. Speaker 200:07:33Our initiative has advanced customer loyalty, providing operational efficiency and optimizing our marketing spend. Premium program numbers generate 1.4 times the monthly order frequency after joining the program, confirming us as their go to e commerce platform. This quarter, we further enriched the programs offering, which has already been more advantageous compared to our competitors, as shown on the right side of the slide side by side. By including summer special deals and exclusive campaigns, the program's value proposition has become even more attractive. Has the program strong NPS scores the confidence and appreciation of its numbers? Speaker 200:08:21It is clear that affordability has gained significance in the current macroeconomic climate in Turkey. Therefore, setting us apart is our in house fintech strength that redefines the affordability in the e commerce sector. We leverage our unique e money and payment services license to offer a set of payment solutions. These include our own debit card, buy now, pay later solution as well as top up to wallet and point of sale shopping law. Within seconds, our customers are able to check their buy now, pay later limits, complete their purchases at their convenience. Speaker 200:09:01Collaboration is at our core. We integrate with strategic banking partners. We enable seamless transactions. A variety of options means convenience and freedom of choice for our customers. We will continue to tailor our solution, such as the upcoming launch of in house consumer financing that will better respond to the customer needs in Turkey. Speaker 200:09:25Now let's take a look at the metrics of our affordability solutions and wallet penetration. On a quarterly addition of 700,000, the HepziPay wallet base shared 12,500,000. In Q2, these users accounted for 86% of our GMV. On the affordability front, the share of total non core affordability solutions in our GMV reached 5%. This is slightly down due to tight liquidity in market, but starting in July, we started to see already recovery in bank's lending appetite. Speaker 200:10:01Covered in debt ratio, our BNPI solution had been utilized by over 207,000 users by end of Q2 on a quarterly rise of 27,000. In the 1st 6 months, our calculations proved that our BNPL offering contributed positively also to our net income. Now moving on to our next strong muscle, it's HepziJet. HepciJet is one of the leading last mile delivery companies in Turkey, which has an asset light business model. Hep Cipurada continued offering its competitive services, including oversized delivery that differentiates us in the market. Speaker 200:10:43Swift and timely delivery is a core customer expectation. And so HepziJet's 83% next day delivery ratio among 1P orders to confirm our commitment to this. Meanwhile, Hepzijet continued its penetration of our merchant base, delivering around 66 Based on the surveys conducted in the Q2, Hepsijet also maintained its clear NPS leadership. In pursuit of profitability, we delivered yet another quarter of positive EBITDA fueled by our core strength and cost management. Our fundamental building blocks of sustainable and profitable growth have translated into now approval results. Speaker 200:11:37Notably, our EBITDA as a percentage of GMV continues to improve from 1.2% a quarter ago, unadjusted for inflation. We remain committed to this path given its promising trajectory so far. As you know, offering our best in class last mile delivery services and our payment and lending services to other retailers is the 4th and large killer pillar of our strategy. Hepci Jet, a logistic powerhouse, lies at the heart of the sandbaver. To that end, the share of external consumer volume in HepziJet's operations increased by 26 percent year over year in units. Speaker 200:12:23Now it reached 27% of total HepziJet business in this quarter. HepziJet served nearly 1600 external customers with some of the names international and local leading brands you see on the chart. I believe Hepzijet is the best position to build on this momentum and grow its shares in logistics market. Now let me elaborate on the next slide, which is HepziPay. HepziPay is on route to become leading fintech player in Turkey. Speaker 200:12:58In Q2, we released several noteworthy new services, including HepziPay debit card, which provides frictionless physical and online transactions. We started payments with QR for SWIP off platform transaction, and we launched wallet top up with loans for financial flexibility. This capability adheres to our always full wallet motto. Additionally, we introduced OneClick Checkout Integration on another retailer towards building the pay with Hebsi Pay proposition. The envisaged growth in OneClick Checkout integrations will become instrumental in Hebsi Pay's soft platform expansion. Speaker 200:13:41In addition, Hebsi Pay has taken strategic steps towards solidifying its position in the fintech arena. We built a 5 year strategic collaboration with Visa in relation to its prepaid Karski. We invested in a leading payment orchestration Form in Turkey, Craftgate Technology. Craftgate helps e commerce companies easily integrate and manage the virtual point of sale of banks and Imani Institutions from a single platform. Our investment in Craftgate is aligned with our vision of leading the Financial Technologies Markets in Turkey, and we believe that it will further foster the growth of our e commerce partners. Speaker 200:14:23Overall, Hepzi pays solid 12,500,000 wallet base and most diverse affordability solution, its own loyalty program, Fast and reliable one clinic checkout we offer to other sellers and our strategic alliances create huge competitive advantage and this is enabling us to become the leading fintech player in Turkey. I'll end my presentation now with our guidance. Despite the ongoing macroeconomic challenges, we expect continued solid GMV growth of around 110% year on year compared to same quarter of last year unadjusted for inflation. We base this expectation on our service quality, affordability solutions and our effective loyalty program. Our positive EBITDA trend will continue, and we expect to deliver EBITDA as a percentage of GMV within the range of 0.5% to 1%. Speaker 200:15:25These figures are unadjusted for inflation. Looking ahead, we are poised to print full year positive unadjusted EBITDA in 2023. This is underscoring our commitment to sustainable and profitable growth. With this, I thank you for listening and leave the floor to our CFO, Cor Hannu, to give more color to our financial performance in the Q2. Thank you. Speaker 300:15:52Thank you, Niran, and welcome, everyone. We gave a robust performance across all metrics during the Q2. This performance was achieved despite election uncertainty, now over and ongoing macroeconomic challenges. On adjusted for inflation, our GMV more than doubled in Q2 on a yearly basis to TRY 18,500,000,000. Similarly, our IAS 29 unadjusted revenue also more than doubled on a yearly basis. Speaker 300:16:22When adjusted for inflation, GMV and revenue growth were both at 43%. GMV growth resulted from over 27,500,000 orders, marking around 95% year over year growth. Gross contribution margin came in at 10.4%. Adjusted for inflation, this metric rose 9.3% on a 4.4 percentage point improvement on a yearly basis. Q2 was the 2nd consecutive quarter for positive EBITDA unadjusted for inflation. Speaker 300:16:57Accordingly, Our EBITDA as a percentage of GMV reached 2% on a 4.7 percentage point rise year over year. Excluding the positive impact of TL 105,000,000 Competition Board investigation provision reversal, Our EBITDA as a percentage of GMV was at 1.5%. Also adjusted for inflation, this metric was at 0.3 percent on a 6.5 percentage point improvement. In the 1st 6 months, Our revenue growth and gross contribution margin were at 29% and 9.3%, respectively, adjusted for inflation. Our EBITDA as a percentage of GMV was 0.2% adjusted for both the one off and inflation. Speaker 300:17:49We generated TRY 881,000,000 net income this quarter, up from a net loss of TRY 7 TRY 83,000,000 in Q2 2022. This resulted from TRY 975,000,000 improvement in EBITDA, TRY 583 million increase in net financial income and TRY 170 million monetary gain in Q2 2023, against TRY 64,000,000 increase in depreciation and amortization. On the next slide, let's to elaborate on our progress towards profitability. 43% of g and d growth came through 27,500,000 orders in Q2. This performance is a result of our value proposition supported by the hep C. Speaker 300:18:39BURRATA Premium Loyalty Program and our Affordability Solutions. Our digital products contribute to the order frequency of participating customer segments. Yet excluding these orders, our order growth was still around 20%. During the Q2, we saw a 3.1 percentage point shift in G and D mix towards 3P to 67%. 1P operations remain among the key competitive advantages. Speaker 300:19:11On the next slide, I will discuss our revenue and gross contribution performance. First, some details on our revenues. Around 63% revenue growth was achieved mainly by 32 increase in retail revenue and then 87% growth in marketplace revenue. Our retail and marketplace operations comprise 88% of our revenues. Our delivery service revenue, comprising 9.2% of total revenue, rose 67% compared to Q2 2022. Speaker 300:19:48Meanwhile, other revenue, which mainly consists of our advertising services, fulfillment services and loyalty program subscription fees tripled compared to Q2 2022. Our gross contribution margin in the 2nd quarter was 9.3% with a remarkable improvement of 4.4 percentage points compared to the same quarter last year. This was mainly attributable to lower quarterly inflation impact on the cost of inventory sold and better inventory management and change in G and D category mix. Let's move to EBITDA performance on the next slide. Continued G and D and top line growth, our focus on cost and marketing campaign optimization enabled us to deliver for another quarter. Speaker 300:20:42The 7 percentage point year over year improvement in EBITDA as a Percentage of GMV was mainly due to a 4.4 percentage point rise in gross contribution margin, 1.6 percentage point decline in advertising expenses, 1 percentage point improvement in other OpEx items, which includes the 0.5 percentage point positive impact of the provision reversal. OpEx as a percentage of G and D was of 8.5% in this quarter, thus 2.6 percentage points lower compared to 11.1% in the Q2 of last year. Overall efficiency in marketing spend was achieved through our win through loyalty strategy, data driven marketing and core marketing partnership. Next, a few words on our cash flow dynamics. Compared to Q2 2022, the TRY 1,000,000,000 decrease in cash flow from operating activities mainly resulted from TRY 782,000,000 decrease in change in inventories. Speaker 300:21:51In addition, we made a TRY 283,000,000 payment to to the litigation case. We continue to operate with negative net working capital during the Q2. The TRY 1,700,000,000 change in negative net working capital was mainly driven by a decrease in trade payables due to payments in Q2 as a result of higher inventory procurements and for some, bit shorter payment terms. An increase in inventories due to plant procurement in Q2 and a decrease in provisions due to payment to an escrow account in relation to U. S. Speaker 300:22:28Litigation settlement and the closure of the competition authority investigation. CapEx was around TRY 100 and TRY76 million. Overall, our free cash flow was negative TRY607 million in Q2 2023. Before we end our call, I would like to highlight the 5 main points of our presentation today. We delivered better than expected EBITDA through stronger top line growth and diligent cost management. Speaker 300:22:58We continue executing on our well defined The 4.4 percentage point improvement in our gross contribution margin and 7 percentage point rise in EBITDA as a percentage of GMV has given us confidence for the second half. We generated a net income at TRY 881,000,000 through improved EBITDA, strong financial income and monetary gain. Our strong muscles, including logistics and fintech services, suggest additional revenue streams for our company. In the second half of the year, we will continue to work diligently to deliver best possible results, creating long term value for all our stakeholders. Thank you for listening. Speaker 300:23:47We can now open the line for questions. Operator00:23:52Ladies and gentlemen, at this time, we will begin the question and answer session. The first question comes from the line of Quilekiran Hazate with JPMorgan. Please go ahead. Speaker 400:24:30Hello. Thank you very much for the presentation and congratulations for very strong numbers. I want to follow-up with your guidance for the 3rd quarter. It is a very strong growth as expected inflation, I think it's Around 65%. So I'm trying to understand the drivers behind this accelerated GME guidance for the 3rd quarter. Speaker 400:24:55And also, are you seeing I mean, substantial increase in the share of nonelectronics in the GMV mix also in the Q3. 2nd question, we really appreciate if you can comment around the competitive environment in the Q3, particularly from the perspective of the discounts in the market. And finally, on the numbers, How would you guide the working capital progress for the Q3 after the buildup of inventory in the Q2? Thank you very much. Speaker 200:25:31Thank you so much, Hamzade. Let me answer the first three, and I'll let Corhan to give some color for our working capital So in terms of guidance, we are expecting our growth momentum to continue to accelerate behind our 4 strategies. The number 1 is Hepzi Purada Premium Program. This program has been quite strong as we celebrate its 1st anniversary. The more we build members to the program, the more we have Frequency increase and it will accelerate momentum in Q3. Speaker 200:26:08That's number 1. The second is the need for affordability solutions. As the inflation and macroeconomic context evolves, partly inflation triggers consumption, but partly It also has an impact on the need for more affordability solution. So we also believe that we have a strategic advantage with the variety of solutions we provide for the consumers. I also believe that our B2B business, which is The bigger one being Hepdige and Fintech in development is also going to continue their acceleration on that. Speaker 200:26:46And I think all in all, We feel comfortable in accelerating the growth momentum. In terms of your second question, money electronics mix, It is not specifically rely our growth expectation and our growth guidance doesn't rely on just non It's something we feel quite strategic about. As we build more loyalty with the program, we are adding more non electronics into the mix, But Q3 specifically is back to school season. There will be an impact of absolutely a lot of electronics purchases with laptops, both for school segment. So we don't specifically expect a jump for Q3, I think your first question was on the competitive environment. Speaker 200:27:42So competition environment is always vivid in Turkey. There are we have Strong competition, global competition from Amazon and Alibaba, which is tranual in Turkey. We also have now N11, which is coming back With some purchase emphasis on Turkish market from Getere as well. I think It's going to be continue to be competitive, but e commerce market in Turkey, we shouldn't forget it only has 70% penetration And there is significant momentum to still improve and create category creation for e commerce. And despite the context to the environment, I believe in our strength, which is quite different than unique. Speaker 200:28:32We are from Turkey. We are very agile. We understand the And the values of our 4 pillar strategy does resonate very well. So I think we'll continue to deliver value for our customers and our shareholders. Now I want to hand over to Corjan for Investor Relations. Speaker 300:28:49Thank you, Nirjan. Hamzade, as you know, From history, there is a seasonality in our business. And especially in the second half, with back to school period, there is a campaign period starting, continues with the Black Friday and December period. So we will continue generating more GMVs in the second half and consequently, This will improve our net working capital. And as usual, we will continue to generate better net working capital in the second half and improve our free cash flow going forward. Speaker 400:29:24Thank you very much. I want to make a follow-up on the competition side. So the market is still very competitive, but Does it put some sort of pressure on your commission rates in the 3rd quarter because we observed Speaker 200:29:47Thank you, Expectation, Hamzah, they're seeing the trend in Turkey as well. I think our plan is strong. That's why we are giving still a Strong guidance on EBITDA, which is between 0.1% to 1%. We don't have Expectations beyond what is happening today, and I feel comfortable in the guidance we have given. Okay. Speaker 200:30:12Thank you very much. Thank you. Operator00:30:39Ladies and gentlemen, there are no further questions at this time. The conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good afternoon.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallD-Market Elektronik Hizmetler ve Ticaret A.S. Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) D-Market Elektronik Hizmetler ve Ticaret A.S. Earnings HeadlinesD-MARKET Elektronik Hizmetler ve Ticaret A.S: Hepsiburada Announces Fourth Quarter and Full Year 2024 Financial ResultsMay 2, 2025 | finanznachrichten.deHepsiburada Announces the Fourth Bond Issuance of HepsifinansMay 2, 2025 | globenewswire.comElon’s Terrifying Warning Forces Trump To Take ActionElon Musk has avoided two major financial crises before. He pulled Tesla and SpaceX back from the brink of collapse and built two of the most valuable companies in history. Now, he's sounding the alarm about America's $36 trillion debt time bomb that could destroy the fabric of our society.As head of the Department of Government Efficiency (DOGE) under President Trump, Musk is exposing just how bad things are...May 6, 2025 | American Hartford Gold (Ad)Q4 2024 D Market Elektronik Hizmetler ve Ticaret AS Earnings CallMay 1, 2025 | finance.yahoo.comD-Market Elektronik Hizmetler ve Ticaret A.S. (HEPS) Q4 2024 Results Conference Call TranscriptApril 30, 2025 | seekingalpha.comHepsiburada Files Its 2024 Annual Report on Form 20-FApril 30, 2025 | globenewswire.comSee More D-Market Elektronik Hizmetler ve Ticaret A.S. Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like D-Market Elektronik Hizmetler ve Ticaret A.S.? Sign up for Earnings360's daily newsletter to receive timely earnings updates on D-Market Elektronik Hizmetler ve Ticaret A.S. and other key companies, straight to your email. Email Address About D-Market Elektronik Hizmetler ve Ticaret A.S.D-Market Elektronik Hizmetler ve Ticaret A.S. (NASDAQ:HEPS) operates e-commerce platforms in Turkey. The company operates www.hepsiburada.com, a retail website that provides its retail customers a range of merchandise, including electronics and non-electronics products, such as books, sports, toys, kids and baby products, cosmetics, furniture, etc. It also offers Hepsiburada Market, an app-in-app initiative and on-demand delivery service that delivers groceries and water; HepsiJet that provides last-mile delivery services; HepsiLojistik, which offers storage and fulfillment services; HepsiMat, an offline network of pick-up and drop-off point; HepsiAd that provides advertising service; HepsiGlobal for discovering and purchasing products from international merchants online; Hepsipay, which offers an e-money and payment services; and Hepsiburada Seyahat for buying airline tickets online. The company was incorporated in 2000 and is headquartered in Istanbul, Turkey.View D-Market Elektronik Hizmetler ve Ticaret A.S. 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There are 5 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. I am Gaele, your Chorus Call operator. Welcome and thank you for joining the HEPSI PURRATA conference call and Live Webcast to Present and Discuss the Second Quarter 2023 Financial Results. All participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Operator00:00:26Star and 0 on your telephone. At this time, I would like to turn the conference over to Ms. Nilhan Upteikim, CEO Mr. Corhan Oz, CFO and Ms. Helene Selig Pelik, Investor Relations Director. Operator00:00:39Ms. Selig Pelik, you may now proceed. Speaker 100:00:42Thanks, operator. Thank you for joining us today for HebsiBorada's Q2 2023 earnings call. I'm pleased to be joined on the call today by our CEO, Niran Onal Gokcetykin and our CFO, Korhan Oz. The following discussion, including responses to your Questions reflect management's views as of today's date only. We undertake no obligation to update or revise this information except as required by law. Speaker 100:01:08Certain statements made on today's call are forward looking statements and actual results may differ materially from these forward looking statements. Please refer to today's earnings release as well as the risk factors described in the Safe Harbor slide of today's supplemental slide deck, today's press release, the 6 ks, our Form 20 F filed with the SEC on May 1, 2023, and other SEC filings for informational factors that could cause our Actual results to differ materially from these forward looking statements. Also, we will reference certain non IFRS measures during today's call. Please refer to the appendix of our supplemental slide deck as well as today's press release for a presentation of the most directly comparable IFRS measure and the relevant IFRS to non IFRS reconciliation. As a reminder, a replay of this call will be available on our Investor Relations website. Speaker 100:01:58With that, I will hand it over to our CEO, Niran. Speaker 200:02:01Thank you, Helen. Welcome, everyone, and thank you so much for joining us. I'm really pleased to be with you today and to to present our quarterly progress. In a quarter of continued tough macroeconomic conditions and uncertainties Throughout the election process, we doubled our GMV year over year and improved our profitability margin. Our robust performance exceeded our quarterly guidance, thanks to our operational agility. Speaker 200:02:30A staggering 77,500,000 orders On a 94.6 percent rise over Q2 'twenty two resulted in strong GMV growth. This was achieved through our attractive customer and merchant value proposition and compelling services. Our focus on profitability led to a notable 10.4% gross contribution margin, which is 200 bps year over year. This metric underscores our strategic actions of lowering promotion spending, growing the share of nonelectronics and marketplace operations in the GMV mix. Furthermore, our EBITDA as percentage of GMV reached an impressive 2% is plus 4.70 basis points year over year. Speaker 200:03:22This is achieved through effective OpEx management. Excluding the one off provision reversal, 1.5 percent EBITDA still exceeded our quarterly guidance. Meanwhile, we remain Turkey's foremost e commerce place in NPS with our exceptional customer service, top notch logistics services and diverse affordability solutions. With over 1,300,000 members, Hepse Puroda Premium is on track to contribute to order frequency and customer retention. Overall, our 2nd quarter results are characterized by solid growth and higher profitability. Speaker 200:04:06It is worth spending another minute on this quarter's guidance performance. Our GMV growth of 101% outpaced our guidance of around 95%. Strong growth coupled with diligent cost management resulted in an EBITDA as percentage of GMV at 2%. This 0.5 percentage points higher than the upfront of the guidance excluding the one off. Our performance validates the effectiveness of our strategies for driving sustained profitable growth. Speaker 200:04:43Our active customer base reached 12,000,000 with more than 300,000 drives during the quarter. With the 77,500,000 orders, the order frequency reached 8.1, marking 57% growth year on year for the quarter. We continue to invest in our technology. Coupled with our outstanding service quality. This suggests the potential for higher customer engagement on our platform. Speaker 200:05:13Next slide, please. We greatly value our wide merchant base. They benefit from our full array of services, including fulfillment, logistics and advertising solutions and enjoy greater efficiency while working with us. In the second quarter, our active merchant base exceeded 101,000 merchants, and total SKUs rose by 50% year on year to nearly 195,000,000 We continue to invest in our in house merchant application that facilitates proactive campaign and ad management and customer communication, among many other capabilities. Our merchant ad has a solid rating at the store, and its ease of use increases the merchant appreciation of hep C. Speaker 200:06:03BURRADEA. Next slide please. As ever, we diligently execute on our priorities. Our results confirm a solid execution of our strategy. We maintain our competitive edge, grow sustainably and profitably as seen in our numbers. Speaker 200:06:22So let me recap on our strategy, which I shared earlier this year. Firstly, hep C. BURRATA premium program, The key to increasing customer loyalty is advancing its plan. We welcome the rising share of program numbers in our total orders. Secondly, we cultivate sustainable differentiators such as affordability solutions, excellent platform and delivery services that effectively benefit our customers. Speaker 200:06:51Thirdly, our efforts to streamline costs and FineTune core operations are well on track. This is reinforced by our progress in the quarter. Last but not least, our logistics services and fintech solutions for 3rd party continue to generate additional revenue streams, while supporting the growth of Turkey's total retail market. Next, take a A closer look at the fundamentals of our Hepse Puroda premium program, which marked its 1st anniversary in July. Through a net addition of 500,000 in the first half of the year, total program numbers reached 1,300,000. Speaker 200:07:33Our initiative has advanced customer loyalty, providing operational efficiency and optimizing our marketing spend. Premium program numbers generate 1.4 times the monthly order frequency after joining the program, confirming us as their go to e commerce platform. This quarter, we further enriched the programs offering, which has already been more advantageous compared to our competitors, as shown on the right side of the slide side by side. By including summer special deals and exclusive campaigns, the program's value proposition has become even more attractive. Has the program strong NPS scores the confidence and appreciation of its numbers? Speaker 200:08:21It is clear that affordability has gained significance in the current macroeconomic climate in Turkey. Therefore, setting us apart is our in house fintech strength that redefines the affordability in the e commerce sector. We leverage our unique e money and payment services license to offer a set of payment solutions. These include our own debit card, buy now, pay later solution as well as top up to wallet and point of sale shopping law. Within seconds, our customers are able to check their buy now, pay later limits, complete their purchases at their convenience. Speaker 200:09:01Collaboration is at our core. We integrate with strategic banking partners. We enable seamless transactions. A variety of options means convenience and freedom of choice for our customers. We will continue to tailor our solution, such as the upcoming launch of in house consumer financing that will better respond to the customer needs in Turkey. Speaker 200:09:25Now let's take a look at the metrics of our affordability solutions and wallet penetration. On a quarterly addition of 700,000, the HepziPay wallet base shared 12,500,000. In Q2, these users accounted for 86% of our GMV. On the affordability front, the share of total non core affordability solutions in our GMV reached 5%. This is slightly down due to tight liquidity in market, but starting in July, we started to see already recovery in bank's lending appetite. Speaker 200:10:01Covered in debt ratio, our BNPI solution had been utilized by over 207,000 users by end of Q2 on a quarterly rise of 27,000. In the 1st 6 months, our calculations proved that our BNPL offering contributed positively also to our net income. Now moving on to our next strong muscle, it's HepziJet. HepciJet is one of the leading last mile delivery companies in Turkey, which has an asset light business model. Hep Cipurada continued offering its competitive services, including oversized delivery that differentiates us in the market. Speaker 200:10:43Swift and timely delivery is a core customer expectation. And so HepziJet's 83% next day delivery ratio among 1P orders to confirm our commitment to this. Meanwhile, Hepzijet continued its penetration of our merchant base, delivering around 66 Based on the surveys conducted in the Q2, Hepsijet also maintained its clear NPS leadership. In pursuit of profitability, we delivered yet another quarter of positive EBITDA fueled by our core strength and cost management. Our fundamental building blocks of sustainable and profitable growth have translated into now approval results. Speaker 200:11:37Notably, our EBITDA as a percentage of GMV continues to improve from 1.2% a quarter ago, unadjusted for inflation. We remain committed to this path given its promising trajectory so far. As you know, offering our best in class last mile delivery services and our payment and lending services to other retailers is the 4th and large killer pillar of our strategy. Hepci Jet, a logistic powerhouse, lies at the heart of the sandbaver. To that end, the share of external consumer volume in HepziJet's operations increased by 26 percent year over year in units. Speaker 200:12:23Now it reached 27% of total HepziJet business in this quarter. HepziJet served nearly 1600 external customers with some of the names international and local leading brands you see on the chart. I believe Hepzijet is the best position to build on this momentum and grow its shares in logistics market. Now let me elaborate on the next slide, which is HepziPay. HepziPay is on route to become leading fintech player in Turkey. Speaker 200:12:58In Q2, we released several noteworthy new services, including HepziPay debit card, which provides frictionless physical and online transactions. We started payments with QR for SWIP off platform transaction, and we launched wallet top up with loans for financial flexibility. This capability adheres to our always full wallet motto. Additionally, we introduced OneClick Checkout Integration on another retailer towards building the pay with Hebsi Pay proposition. The envisaged growth in OneClick Checkout integrations will become instrumental in Hebsi Pay's soft platform expansion. Speaker 200:13:41In addition, Hebsi Pay has taken strategic steps towards solidifying its position in the fintech arena. We built a 5 year strategic collaboration with Visa in relation to its prepaid Karski. We invested in a leading payment orchestration Form in Turkey, Craftgate Technology. Craftgate helps e commerce companies easily integrate and manage the virtual point of sale of banks and Imani Institutions from a single platform. Our investment in Craftgate is aligned with our vision of leading the Financial Technologies Markets in Turkey, and we believe that it will further foster the growth of our e commerce partners. Speaker 200:14:23Overall, Hepzi pays solid 12,500,000 wallet base and most diverse affordability solution, its own loyalty program, Fast and reliable one clinic checkout we offer to other sellers and our strategic alliances create huge competitive advantage and this is enabling us to become the leading fintech player in Turkey. I'll end my presentation now with our guidance. Despite the ongoing macroeconomic challenges, we expect continued solid GMV growth of around 110% year on year compared to same quarter of last year unadjusted for inflation. We base this expectation on our service quality, affordability solutions and our effective loyalty program. Our positive EBITDA trend will continue, and we expect to deliver EBITDA as a percentage of GMV within the range of 0.5% to 1%. Speaker 200:15:25These figures are unadjusted for inflation. Looking ahead, we are poised to print full year positive unadjusted EBITDA in 2023. This is underscoring our commitment to sustainable and profitable growth. With this, I thank you for listening and leave the floor to our CFO, Cor Hannu, to give more color to our financial performance in the Q2. Thank you. Speaker 300:15:52Thank you, Niran, and welcome, everyone. We gave a robust performance across all metrics during the Q2. This performance was achieved despite election uncertainty, now over and ongoing macroeconomic challenges. On adjusted for inflation, our GMV more than doubled in Q2 on a yearly basis to TRY 18,500,000,000. Similarly, our IAS 29 unadjusted revenue also more than doubled on a yearly basis. Speaker 300:16:22When adjusted for inflation, GMV and revenue growth were both at 43%. GMV growth resulted from over 27,500,000 orders, marking around 95% year over year growth. Gross contribution margin came in at 10.4%. Adjusted for inflation, this metric rose 9.3% on a 4.4 percentage point improvement on a yearly basis. Q2 was the 2nd consecutive quarter for positive EBITDA unadjusted for inflation. Speaker 300:16:57Accordingly, Our EBITDA as a percentage of GMV reached 2% on a 4.7 percentage point rise year over year. Excluding the positive impact of TL 105,000,000 Competition Board investigation provision reversal, Our EBITDA as a percentage of GMV was at 1.5%. Also adjusted for inflation, this metric was at 0.3 percent on a 6.5 percentage point improvement. In the 1st 6 months, Our revenue growth and gross contribution margin were at 29% and 9.3%, respectively, adjusted for inflation. Our EBITDA as a percentage of GMV was 0.2% adjusted for both the one off and inflation. Speaker 300:17:49We generated TRY 881,000,000 net income this quarter, up from a net loss of TRY 7 TRY 83,000,000 in Q2 2022. This resulted from TRY 975,000,000 improvement in EBITDA, TRY 583 million increase in net financial income and TRY 170 million monetary gain in Q2 2023, against TRY 64,000,000 increase in depreciation and amortization. On the next slide, let's to elaborate on our progress towards profitability. 43% of g and d growth came through 27,500,000 orders in Q2. This performance is a result of our value proposition supported by the hep C. Speaker 300:18:39BURRATA Premium Loyalty Program and our Affordability Solutions. Our digital products contribute to the order frequency of participating customer segments. Yet excluding these orders, our order growth was still around 20%. During the Q2, we saw a 3.1 percentage point shift in G and D mix towards 3P to 67%. 1P operations remain among the key competitive advantages. Speaker 300:19:11On the next slide, I will discuss our revenue and gross contribution performance. First, some details on our revenues. Around 63% revenue growth was achieved mainly by 32 increase in retail revenue and then 87% growth in marketplace revenue. Our retail and marketplace operations comprise 88% of our revenues. Our delivery service revenue, comprising 9.2% of total revenue, rose 67% compared to Q2 2022. Speaker 300:19:48Meanwhile, other revenue, which mainly consists of our advertising services, fulfillment services and loyalty program subscription fees tripled compared to Q2 2022. Our gross contribution margin in the 2nd quarter was 9.3% with a remarkable improvement of 4.4 percentage points compared to the same quarter last year. This was mainly attributable to lower quarterly inflation impact on the cost of inventory sold and better inventory management and change in G and D category mix. Let's move to EBITDA performance on the next slide. Continued G and D and top line growth, our focus on cost and marketing campaign optimization enabled us to deliver for another quarter. Speaker 300:20:42The 7 percentage point year over year improvement in EBITDA as a Percentage of GMV was mainly due to a 4.4 percentage point rise in gross contribution margin, 1.6 percentage point decline in advertising expenses, 1 percentage point improvement in other OpEx items, which includes the 0.5 percentage point positive impact of the provision reversal. OpEx as a percentage of G and D was of 8.5% in this quarter, thus 2.6 percentage points lower compared to 11.1% in the Q2 of last year. Overall efficiency in marketing spend was achieved through our win through loyalty strategy, data driven marketing and core marketing partnership. Next, a few words on our cash flow dynamics. Compared to Q2 2022, the TRY 1,000,000,000 decrease in cash flow from operating activities mainly resulted from TRY 782,000,000 decrease in change in inventories. Speaker 300:21:51In addition, we made a TRY 283,000,000 payment to to the litigation case. We continue to operate with negative net working capital during the Q2. The TRY 1,700,000,000 change in negative net working capital was mainly driven by a decrease in trade payables due to payments in Q2 as a result of higher inventory procurements and for some, bit shorter payment terms. An increase in inventories due to plant procurement in Q2 and a decrease in provisions due to payment to an escrow account in relation to U. S. Speaker 300:22:28Litigation settlement and the closure of the competition authority investigation. CapEx was around TRY 100 and TRY76 million. Overall, our free cash flow was negative TRY607 million in Q2 2023. Before we end our call, I would like to highlight the 5 main points of our presentation today. We delivered better than expected EBITDA through stronger top line growth and diligent cost management. Speaker 300:22:58We continue executing on our well defined The 4.4 percentage point improvement in our gross contribution margin and 7 percentage point rise in EBITDA as a percentage of GMV has given us confidence for the second half. We generated a net income at TRY 881,000,000 through improved EBITDA, strong financial income and monetary gain. Our strong muscles, including logistics and fintech services, suggest additional revenue streams for our company. In the second half of the year, we will continue to work diligently to deliver best possible results, creating long term value for all our stakeholders. Thank you for listening. Speaker 300:23:47We can now open the line for questions. Operator00:23:52Ladies and gentlemen, at this time, we will begin the question and answer session. The first question comes from the line of Quilekiran Hazate with JPMorgan. Please go ahead. Speaker 400:24:30Hello. Thank you very much for the presentation and congratulations for very strong numbers. I want to follow-up with your guidance for the 3rd quarter. It is a very strong growth as expected inflation, I think it's Around 65%. So I'm trying to understand the drivers behind this accelerated GME guidance for the 3rd quarter. Speaker 400:24:55And also, are you seeing I mean, substantial increase in the share of nonelectronics in the GMV mix also in the Q3. 2nd question, we really appreciate if you can comment around the competitive environment in the Q3, particularly from the perspective of the discounts in the market. And finally, on the numbers, How would you guide the working capital progress for the Q3 after the buildup of inventory in the Q2? Thank you very much. Speaker 200:25:31Thank you so much, Hamzade. Let me answer the first three, and I'll let Corhan to give some color for our working capital So in terms of guidance, we are expecting our growth momentum to continue to accelerate behind our 4 strategies. The number 1 is Hepzi Purada Premium Program. This program has been quite strong as we celebrate its 1st anniversary. The more we build members to the program, the more we have Frequency increase and it will accelerate momentum in Q3. Speaker 200:26:08That's number 1. The second is the need for affordability solutions. As the inflation and macroeconomic context evolves, partly inflation triggers consumption, but partly It also has an impact on the need for more affordability solution. So we also believe that we have a strategic advantage with the variety of solutions we provide for the consumers. I also believe that our B2B business, which is The bigger one being Hepdige and Fintech in development is also going to continue their acceleration on that. Speaker 200:26:46And I think all in all, We feel comfortable in accelerating the growth momentum. In terms of your second question, money electronics mix, It is not specifically rely our growth expectation and our growth guidance doesn't rely on just non It's something we feel quite strategic about. As we build more loyalty with the program, we are adding more non electronics into the mix, But Q3 specifically is back to school season. There will be an impact of absolutely a lot of electronics purchases with laptops, both for school segment. So we don't specifically expect a jump for Q3, I think your first question was on the competitive environment. Speaker 200:27:42So competition environment is always vivid in Turkey. There are we have Strong competition, global competition from Amazon and Alibaba, which is tranual in Turkey. We also have now N11, which is coming back With some purchase emphasis on Turkish market from Getere as well. I think It's going to be continue to be competitive, but e commerce market in Turkey, we shouldn't forget it only has 70% penetration And there is significant momentum to still improve and create category creation for e commerce. And despite the context to the environment, I believe in our strength, which is quite different than unique. Speaker 200:28:32We are from Turkey. We are very agile. We understand the And the values of our 4 pillar strategy does resonate very well. So I think we'll continue to deliver value for our customers and our shareholders. Now I want to hand over to Corjan for Investor Relations. Speaker 300:28:49Thank you, Nirjan. Hamzade, as you know, From history, there is a seasonality in our business. And especially in the second half, with back to school period, there is a campaign period starting, continues with the Black Friday and December period. So we will continue generating more GMVs in the second half and consequently, This will improve our net working capital. And as usual, we will continue to generate better net working capital in the second half and improve our free cash flow going forward. Speaker 400:29:24Thank you very much. I want to make a follow-up on the competition side. So the market is still very competitive, but Does it put some sort of pressure on your commission rates in the 3rd quarter because we observed Speaker 200:29:47Thank you, Expectation, Hamzah, they're seeing the trend in Turkey as well. I think our plan is strong. That's why we are giving still a Strong guidance on EBITDA, which is between 0.1% to 1%. We don't have Expectations beyond what is happening today, and I feel comfortable in the guidance we have given. Okay. Speaker 200:30:12Thank you very much. Thank you. Operator00:30:39Ladies and gentlemen, there are no further questions at this time. The conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good afternoon.Read morePowered by