NASDAQ:HEPS D-Market Elektronik Hizmetler ve Ticaret A.S. Q1 2024 Earnings Report $2.48 +0.01 (+0.20%) Closing price 03:58 PM EasternExtended Trading$2.49 +0.01 (+0.20%) As of 05:04 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-$0.01Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AD-Market Elektronik Hizmetler ve Ticaret A.S. Revenue ResultsActual Revenue$365.55 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AD-Market Elektronik Hizmetler ve Ticaret A.S. Announcement DetailsQuarterQ1 2024Date6/13/2024TimeN/AConference Call DateThursday, June 13, 2024Conference 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. Q1 2024 Earnings Call TranscriptProvided by QuartrJune 13, 2024 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome and thank you for joining the Hepzi Bora conference call and live webcast to present and discuss the Q1 2024 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 At this time, I would like to turn the conference over to Ms. Operator00:00:30Nilhan Onal Koksytekin, CEO Mr. Serzhkin Chosseoglu, CFO and Ms. Helene Celik Bilek, Investor Relations Director. Ms. Celik Bilek, you may now proceed. Operator00:00:41Thanks, Speaker 100:00:51Gokcekinn and our CFO, Sejkin Koseoglu. The following discussion, including responses to your questions, reflects management's views as of today's date only, and we undertake no obligation to update or revise this information except as required by law. Certain 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 April 30, 2024, 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. Speaker 100:01:42Please 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. And with that, I will hand it over to our CEO, Nihan. Speaker 200:02:04Thank you, Helen. Welcome, everyone, and thank you for joining us. I'm delighted to be with you today to present our Q1 results. It has been a strong start to the year as reflected on all our results. Notably, we beat our GMV and EBITDA guidance for the quarter. Speaker 200:02:24Good execution accelerated by the favorable base effects of last year due to a tragic earthquake, drove 138% year on year GMV growth. Adjusted for inflation, our GMV growth was a solid 43%. Our growth contribution Our EBITDA continued its uptrend, rising 120 basis points year on year to 2.4% of GMV on an unadjusted basis. Adjusted for inflation, our EBITDA as a percentage of GMV improved by 70 basis points year on year to 0.8%. These results are a clear sign of our winning strategy. Speaker 200:03:13Now let's have a look at few of our operational metrics. Being Turkey's most recommended e commerce brand once again with an NPS of 73 is a great source of price. We are committed to advancing this performance to the next level. Our active customer base was 12,100,000 on an additional 171,000 customers. We are delighted to see growing interest in our appealing loyalty program, which has scaled to 2,600,000 members by the end of May. Speaker 200:03:47We recorded 29,300,000 orders with 22% growth during the quarter. Our order frequency over the last 12 months reached 9.8%. This is up 30% year over year. With an active merchant base of almost 102,000, we expanded our selection by 38% to nearly 248,000,000 SKUs. Now let me provide a snapshot of our quarterly progress on top four strategic priorities. Speaker 200:04:221st is our loyalty program, HEPTURADA Premium. The program's growing customer base signals customer satisfaction with our proposition. This is also evidenced by program's strong NPS. Also, premium numbers higher frequency significantly contributes to our overall growth. Moving on to 2nd priority, which is differentiation with superior delivery services. Speaker 200:04:49Our superior delivery services is realized with our in house company, HepTijet. Merchant preference for HepTijet services has risen significantly this quarter. Jet delivered 68% of total parcels on our platform. This is up by 1 5.1 percentage point year on year. Its 82% next day delivery ratio among retail orders also confirms its integral role in our ecosystem. Speaker 200:05:21Hesterjet brings wider satisfaction to the Hesterbroda customer. Its fast, reliable and high quality service reflects in our strong customer satisfaction score of 80 sales. Our 3rd differentiator is HexyPay. It's scaling its offering with additions to its already comprehensive suite of payment and lending services. 4th is our strongest muscle offering our strongest muscle to all platform customers. Speaker 200:05:53Let me start with Heptiget, which has more than doubled its volume year on year in Q1. Accordingly, with 3,200,000 parcels delivered, its off Pilaford volume corresponded to nearly 33% of its total Q1. On the next slide, I'll elaborate on Hefty Pay, including its off platform performance. Let me dive into how we are providing these cutting edge solutions with Hep C Pay. In the current economic climate of high interest rates, being able to offer a suite of alternatives is a huge advantage. Speaker 200:06:33In January, we took the further step of including our consumer finance loans to this debt. Meanwhile, our BNPI solution is the largest non bank BNPI solution in the market. Overall, our BNPI and shopping loans were utilized in over 1,100,000 orders over the last 12 months. On a broader scale, over the last 12 months, total lending volume through our platform tripled compared to the same period of last year, and it reached DKK 8,100,000,000. That's roughly equivalent to DKK 290,000,000. Speaker 200:07:12Dollars. STP aims to grow this business line in a profitable manner and take a sizable share in Turkey's $1,000,000,000 consumer loan market. In this capacity, we will continue to leverage hedge to pay solutions as well as those of our partner banks to go over to grow our e commerce business. Aside from affordability aspect, our financial services also encompasses the payments business. In offline retail, HD Pay leads the market with its 15,700,000 wallet base covering 18,000,000 store cards. Speaker 200:07:52Our 1 click checkout solution Pay with FTPA, is also live at 28 key retailers just within less than a year of its launch. Hestipay aims to capture a substantial share both in key accounts as well as in Turkey's sizable online SME market. And now I'll add my part with our guidance. As we lead through the Q2, we observe the continuation of challenging macroeconomic culture cooling off consumer demand to a certain extent. And yet, our platform preserves our relevance for consumer purchases as their trusted household brand. Speaker 200:08:32Accordingly, we expect to deliver growth around 75% year on year in Q2 2024. With that, GMV growth in the first half is expected to double year on year. With continued prudent cost management in place, we foresee an EBITDA within the range of 1.8% to 2% of GRV. As a reminder, our GRV in Q2 last year was 1.5%. So we expect to deliver a year on year improvement in our profitability in Q2. Speaker 200:09:05In these figures, I referred to are an adjusted for inflation. With this, I thank you very much for listening and leave the floor to Tejkit, our dear CFO, provide further insights to our financial performance. Speaker 300:09:20Thank you, Niran, and welcome, everyone. I'm glad to share that we had a robust start to the year with solid performance across all metrics. Adjusted for inflation, GMV grew by 43% in quarter 1. Strong GMV growth was through 17% average order value growth and a 22% increase in total orders. Given the tragic earthquake in February last year and its inevitable impact on our business, last year's low rate also has a positive impact on this growth performance. Speaker 300:09:57Growth contribution margin continued its improvement trend and reached 10.5%. Higher margins coupled with disciplined OpEx management resulted in TRY 289,000,000 EBITDA at 0.8 percent of GMV. For more color on each of these, let's move on to the next slide. First, our GMV performance. 43% of GMV growth came through 29,300,000 orders in quarter 1. Speaker 300:10:30Last 12 month order frequency also increased by 30% to 9.8%. Our marketplace operations corresponded to 68% of our business in quarter 1, 2024 at around the same level of quarter 1 last year. There was nearly 1.4 percentage point shift towards non electronics within GMV this quarter, in line with our strategy. Let's have a look at our revenue growth dynamic. 45% revenue growth in the first quarter was achieved mainly through 38% retail and 32% marketplace operations revenue growth. Speaker 300:11:12Delivery service revenues, which correspond to 14% of total revenues, nearly doubled year on year. This was mainly due to the solid momentum in our off platform business coupled with annual rises in unit delivery service charges above inflation. Our advertising services revenues doubled during this period as well. Meanwhile, other revenue lines grew by 100 and 48%. Such performance was mainly through 4 fold growth in loyalty subscription revenues and higher fulfillment service revenues compared to quarter 1 2023. Speaker 300:11:51On the margin side, adjusted for inflation, we recorded 1.2 percentage points rise in the gross contribution margin reaching 10.5%. Margin improvement was mainly attributable to higher contribution of delivery service revenues from off platform as well as advertising revenues. Let's move on to our EBITDA performance on the next slide. We recorded 0.8% EBITDA as a percentage of GMV in quarter 1 2024 with 75 basis points improvement on a yearly basis. This was mainly through 1.2 percentage point rise in gross contribution margin, partially offset by 0.5% rise in shipping and packaging expenses. Speaker 300:12:42And now let's look at our cash flow dynamics in the next slide. The cash generated from operations was TRY 1,500,000,000 in quarter 1, 2020 4, up from TRY 102,000,000 a year ago. TRY778,000,000 improvement in the change in net working capital year on year accounts for more than half of the increase. Others include TRY 277,000,000 increase in EBITDA, TRY147 1,000,000 increase in the change in operating monetary gain, TRY126 1,000,000 increase in other cash items and RMB 26 1,000,000 increase in realized FX gains. With RMB426 6,000,000 in CapEx, our free cash flow was around TRY 1,000,000,000 in quarter 1, 2024. Speaker 300:13:41Let's move on to the next slide and let's take a look at our key takeaways. We would like to leave you with the following from today's presentation. Our robust top line growth in the Q1 exceeded our guidance. Adjusted for inflation, we recorded 42.5 percent GMV growth on a year on year basis. Our gross contribution margin continued to improve by 1 point 2 percentage points and reached 10.5%. Speaker 300:14:14We recorded TRY 289,000,000 EBITDA corresponding to a 0.75 percent rise in EBITDA as a percentage of GMV. With this performance, we generated a strong free cash flow of TRY 1,000,000,000. Our solid overall performance confirms our sharp focus on winning with loyalty, cultivating our sustainable differentiator and expanding our B2B services as a turnkeyecom solution partner for merchants. As we reflect on the good start to 2024, we are committed to growing on a sustainable and profitable manner going forward. Thank you for listening. Speaker 300:14:58We can now open the lines for questions. Operator00:15:46The first question comes from the line of Gusevary Moheram with Kona Capital. Please go ahead. Speaker 400:15:52Okay. Thank you very much for the presentation. My question will be regarding the 8th whole day that's moving from 3Q to 2nd Q3 this year. What was the impact on the GMV for the Q2 in Jorgen? Thank you. Speaker 300:16:09The impact of the 8 holiday is actually incorporated in our quarter 2 guidance. As you know, we had 2 8 holidays in quarter 2, both of which are already incorporated in our top line guidance. Speaker 400:16:28Understand that. But my question is, if the Aetol Day would stay in the Q3, what would be the GMV growth for this quarter? Speaker 300:16:42This typically impacts our business during holidays, offline sales go up and online sales are impacted. So probably if one was in July, we would have at least a percentage or 2 upwards in the growth trajectory. Speaker 400:17:13Okay. Thank you very much. Operator00:17:32Ladies and gentlemen, there are no further audio questions at this time. We will now proceed with the written questions from our webcast participants. The first webcast question comes from Asif Sattar, who is a Private Investor and I quote, what is our market share in the online retailing in Turkey? We operate in the category in the market. How is our performance versus strong competition Amazon in Turkey? Operator00:18:03Thank you. Speaker 200:18:05Dear, Rasev, thank you so much for your question. We will not be able to give a conclusive comment. But from the public data like FNA, active customer usage, we are seeing that they are still staying as a very small player in Turkey. That's number 1. Number 2 is how we are looking into different segments that we have right to win. Speaker 200:18:40Obviously, number 1 is electronics. We get GSK data in Cuba. We have significant share growth. We are already around 32%. On top of this, we gained share in all of our key categories. Speaker 200:18:56The other data source we look into is Nirstand for non electronics categories. As you guys know, home and mom and baby are very critical segment for us. The needs of the female households, we have like to win that. We are winning share that. For home products, other home products, we are also trying to creating different data sources, and we are seeing that we are gaining significant share there as well. Speaker 200:19:27So overall, we had a strong quarter. We are not able to share exact online share in Turkey because it's not reported, but we are clearly beating our competitors with the share. Operator00:19:50The next webcast question comes from Maximy Nekrasov with Citi and I quote, in what categories do you see higher slowdown starting from Q2 2024? Do you see consumers trading down or decreasing frequency? Speaker 200:20:10Maarten, thank you so much. So generally, the slowdown, we can say it started. The critical part is endurable. And endurable is when you dive deeper, number 1 category I would call out is computer. As you know, computer is more discretionary and there is some deferrals of the demand, delayed demand. Speaker 200:20:37The other one has been TV among our categories, which we are expecting some recovery with Europe and Olympics demand in Q3 as well. The trend we are seeing is trading down and deferral of the demand rather than significantly decreasing frequency of online shopping. Thank you, Max. Operator00:21:07The next webcast question is our follow-up question from Maxim Nekrasov. And I quote, when do you expect to start booking tax expenses? Speaker 300:21:18Sure. I'll take this question. We do not expect to pay corporate taxes in 2024 as we have tax incentives and these are typically our R and D standard tax incentives without any time constraints. And most likely, we will start paying taxes in 2026. Operator00:21:45Next webcast question is again a follow-up question from Asif Sattar, who is a private investor and I quote, what is our EBITDA margin on U. S. GAAP basis in this quarter? And what is expected EBITDA on U. S. Operator00:21:59GAAP basis forecasted for the next quarter? Thank you. Speaker 300:22:04We do not report our financials in U. S. GAAP basis. Operator00:22:14The next webcast question is from Badar Shamim with Generation PMCA Corporation. And I quote, any plans to grow your services in developed markets, including North America? Speaker 200:22:30We don't have plans at the moment, but are to expand Hepta Bora and launch in North America. Having said that, Turkish collection is very, very popular in different parts of the world. We started doing some tests with integrations to other marketplaces to do facilitate micro exports from Turkey. So if you go to Walmart today, you can see our private label, June, already being sold in those stores. And we will continue to expand our cross border services with smart integration versus large investments to this new market. Operator00:23:19The next webcast question is a follow-up question from expected incremental GMV increase due to Jumia and partnership in this year? Thank you. Speaker 200:23:35Look, Asif, we are very, very excited about Jumia partnership. First, let me tell that Mina is the region for Turkish collections. We are winning in home category in Turkey, small domestic appliances that are exportable. And Jumia has seen a huge potential in building this partnership with us. We are still in the building phase. Speaker 200:24:00I am expecting most of the impact to come starting to come next year, Arce, because we are entering fulfilled by Jumia. So we are doing the first shipment. It will take some time for this product to be inbound. We are selecting very, very cost efficient basis to win Jumia and with relevant customers. So nothing significant this year, but definitely watch this space for improvement next year as we complete our integration and leverage their existing traffic of different partners. Operator00:24:45The next webcast question comes from Grant Felgenhauer, who is a Private Investor and I quote. Are you considering a local equity listing in Turkey? Thank you. Speaker 200:24:57So we recognize the potential benefits that a dual listing could bring very well, and we are actively exploring various options to determine the best course of action for our stakeholders. As part of this process, we are evaluating market conditions as well as regulatory requirements involved in adjo listing. At this point, we haven't made a concrete decision regarding a potential listing in Warsaw, Istanbul, but we will keep the market informed as we progress and make any definitive decision. In the meantime, we appreciate your continued support. Operator00:25:38The next webcast question comes from Sinanci with Amber Road Investors and I quote, now what drives management's confidence that it will continue to grow share as global cross border e commerce platforms consider entering the Turkish market? Thank you. Speaker 200:25:56Thank you, Sinan. I think there are a couple of things that gives us confidence that we will sustain and continue to grow share despite global cross border platforms. Number 1, Turkey has a very, very competitive supplier base. As you look into this global cross border success story, absolutely, they have strong playbooks, but they don't have competition like Turkish Station at Home, very, very economical. 2nd, affordability is critical solution for Turkey. Speaker 200:26:33We are the only online company which has the payment license, which can do installments in categories like automatic, SMCG, mobile phone. 3rd, quality meter sell off. In Turkey, this is still number 1 purchase intent driver for Turkish online shopping. And as you know, we are winning with all of our quality metrics. We are year over year NPS champion in Turkey. Speaker 200:27:06So we are up for competition. We appreciate the new entrants that will continue to raise the bar for Turkish customers. We have strong rights of it. And finally, we are also building cross border capabilities, which is passing us. So we just launched our first product in a test environment in Namche. Speaker 200:27:32We signed some partnership with Jumia to build some business together. So we will also grow our cross border business as we grow our Turkish business as well. Operator00:27:50The next webcast question is from James Hayes with Lucerne Global Capital and it's a series of questions and I quote. Initiatives, which may constrain the activities of the larger competitor in the market? 2nd question is, which are the items which have only kicked in early 2025? And are there any additional regulations to take effect later this year? 3rd and final question is, finally, the free cash flow in the quarter was quite impressive. Operator00:28:30Can you provide any medium term thoughts around free cash flow generation capacity or for the full year of 2024? Thank you. Speaker 200:28:40Thank you, James. Very good question. So to quantify, there will be various regulatory initiatives that will constrain the activities of the larger competitor in Turkey. Multiple things. Number 1 is license fee is kicking in in Turkey. Speaker 200:29:01So for the large, largest online player, which has disproportionate share, There will be significant amount of payment to make as license fee to the government. The secondary is, as you know, private label, which was a stronghold of Alibaba in Turkey is banned. We are expecting that there will be continued impact as of 2025. The continued impact of advertising promotion reductions will also have an impact. So these are the 3, I would say, that we say much more democratic environment in Turkey. Speaker 200:29:47This is supporting small, medium sized enterprises could continue to make an impact on the large competitor in the market. And for your cash related questions, I want to turn the floor to Tej Gan. Speaker 300:30:04Thank you so much for the question. As you know, there are 2 components for the free cash flow generation. 1 is EBITDA and the other one is net working capital management. We will continue to grow our EBITDA year over year on a full year basis as well. So definitely, we will be improving on this key pillars of the cash flow for the full year. Speaker 300:30:31On the net working capital side, what I can say that as the higher interest rates and the government actions to minimize the inflation has started to take bigger impact in the market. All companies will be looking into their working capital requirements with increased focus. But we will always continue to be a negative net working capital business. So as our business continues to grow in the top line, this will also be the 2nd layer and the key to increase our free cash flow. So that can be some seasonality impact from one quarter to another. Speaker 300:31:25But on a full year basis, we will continue to improve our free cash flow position in 2024.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallD-Market Elektronik Hizmetler ve Ticaret A.S. Q1 202400:00 / 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.comHere’s How to Claim Your Stake in Elon’s Private Company, xAII predict this single breakthrough could make Elon the world’s first trillionaire — and mint more new millionaires than any tech advance in history. And for a limited time, you have the chance to claim a stake in this project, even though it’s housed inside Elon’s private company, xAI.May 7, 2025 | Brownstone Research (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'm Konstantinos, your Chorus Call operator. Welcome and thank you for joining the Hepzi Bora conference call and live webcast to present and discuss the Q1 2024 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 At this time, I would like to turn the conference over to Ms. Operator00:00:30Nilhan Onal Koksytekin, CEO Mr. Serzhkin Chosseoglu, CFO and Ms. Helene Celik Bilek, Investor Relations Director. Ms. Celik Bilek, you may now proceed. Operator00:00:41Thanks, Speaker 100:00:51Gokcekinn and our CFO, Sejkin Koseoglu. The following discussion, including responses to your questions, reflects management's views as of today's date only, and we undertake no obligation to update or revise this information except as required by law. Certain 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 April 30, 2024, 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. Speaker 100:01:42Please 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. And with that, I will hand it over to our CEO, Nihan. Speaker 200:02:04Thank you, Helen. Welcome, everyone, and thank you for joining us. I'm delighted to be with you today to present our Q1 results. It has been a strong start to the year as reflected on all our results. Notably, we beat our GMV and EBITDA guidance for the quarter. Speaker 200:02:24Good execution accelerated by the favorable base effects of last year due to a tragic earthquake, drove 138% year on year GMV growth. Adjusted for inflation, our GMV growth was a solid 43%. Our growth contribution Our EBITDA continued its uptrend, rising 120 basis points year on year to 2.4% of GMV on an unadjusted basis. Adjusted for inflation, our EBITDA as a percentage of GMV improved by 70 basis points year on year to 0.8%. These results are a clear sign of our winning strategy. Speaker 200:03:13Now let's have a look at few of our operational metrics. Being Turkey's most recommended e commerce brand once again with an NPS of 73 is a great source of price. We are committed to advancing this performance to the next level. Our active customer base was 12,100,000 on an additional 171,000 customers. We are delighted to see growing interest in our appealing loyalty program, which has scaled to 2,600,000 members by the end of May. Speaker 200:03:47We recorded 29,300,000 orders with 22% growth during the quarter. Our order frequency over the last 12 months reached 9.8%. This is up 30% year over year. With an active merchant base of almost 102,000, we expanded our selection by 38% to nearly 248,000,000 SKUs. Now let me provide a snapshot of our quarterly progress on top four strategic priorities. Speaker 200:04:221st is our loyalty program, HEPTURADA Premium. The program's growing customer base signals customer satisfaction with our proposition. This is also evidenced by program's strong NPS. Also, premium numbers higher frequency significantly contributes to our overall growth. Moving on to 2nd priority, which is differentiation with superior delivery services. Speaker 200:04:49Our superior delivery services is realized with our in house company, HepTijet. Merchant preference for HepTijet services has risen significantly this quarter. Jet delivered 68% of total parcels on our platform. This is up by 1 5.1 percentage point year on year. Its 82% next day delivery ratio among retail orders also confirms its integral role in our ecosystem. Speaker 200:05:21Hesterjet brings wider satisfaction to the Hesterbroda customer. Its fast, reliable and high quality service reflects in our strong customer satisfaction score of 80 sales. Our 3rd differentiator is HexyPay. It's scaling its offering with additions to its already comprehensive suite of payment and lending services. 4th is our strongest muscle offering our strongest muscle to all platform customers. Speaker 200:05:53Let me start with Heptiget, which has more than doubled its volume year on year in Q1. Accordingly, with 3,200,000 parcels delivered, its off Pilaford volume corresponded to nearly 33% of its total Q1. On the next slide, I'll elaborate on Hefty Pay, including its off platform performance. Let me dive into how we are providing these cutting edge solutions with Hep C Pay. In the current economic climate of high interest rates, being able to offer a suite of alternatives is a huge advantage. Speaker 200:06:33In January, we took the further step of including our consumer finance loans to this debt. Meanwhile, our BNPI solution is the largest non bank BNPI solution in the market. Overall, our BNPI and shopping loans were utilized in over 1,100,000 orders over the last 12 months. On a broader scale, over the last 12 months, total lending volume through our platform tripled compared to the same period of last year, and it reached DKK 8,100,000,000. That's roughly equivalent to DKK 290,000,000. Speaker 200:07:12Dollars. STP aims to grow this business line in a profitable manner and take a sizable share in Turkey's $1,000,000,000 consumer loan market. In this capacity, we will continue to leverage hedge to pay solutions as well as those of our partner banks to go over to grow our e commerce business. Aside from affordability aspect, our financial services also encompasses the payments business. In offline retail, HD Pay leads the market with its 15,700,000 wallet base covering 18,000,000 store cards. Speaker 200:07:52Our 1 click checkout solution Pay with FTPA, is also live at 28 key retailers just within less than a year of its launch. Hestipay aims to capture a substantial share both in key accounts as well as in Turkey's sizable online SME market. And now I'll add my part with our guidance. As we lead through the Q2, we observe the continuation of challenging macroeconomic culture cooling off consumer demand to a certain extent. And yet, our platform preserves our relevance for consumer purchases as their trusted household brand. Speaker 200:08:32Accordingly, we expect to deliver growth around 75% year on year in Q2 2024. With that, GMV growth in the first half is expected to double year on year. With continued prudent cost management in place, we foresee an EBITDA within the range of 1.8% to 2% of GRV. As a reminder, our GRV in Q2 last year was 1.5%. So we expect to deliver a year on year improvement in our profitability in Q2. Speaker 200:09:05In these figures, I referred to are an adjusted for inflation. With this, I thank you very much for listening and leave the floor to Tejkit, our dear CFO, provide further insights to our financial performance. Speaker 300:09:20Thank you, Niran, and welcome, everyone. I'm glad to share that we had a robust start to the year with solid performance across all metrics. Adjusted for inflation, GMV grew by 43% in quarter 1. Strong GMV growth was through 17% average order value growth and a 22% increase in total orders. Given the tragic earthquake in February last year and its inevitable impact on our business, last year's low rate also has a positive impact on this growth performance. Speaker 300:09:57Growth contribution margin continued its improvement trend and reached 10.5%. Higher margins coupled with disciplined OpEx management resulted in TRY 289,000,000 EBITDA at 0.8 percent of GMV. For more color on each of these, let's move on to the next slide. First, our GMV performance. 43% of GMV growth came through 29,300,000 orders in quarter 1. Speaker 300:10:30Last 12 month order frequency also increased by 30% to 9.8%. Our marketplace operations corresponded to 68% of our business in quarter 1, 2024 at around the same level of quarter 1 last year. There was nearly 1.4 percentage point shift towards non electronics within GMV this quarter, in line with our strategy. Let's have a look at our revenue growth dynamic. 45% revenue growth in the first quarter was achieved mainly through 38% retail and 32% marketplace operations revenue growth. Speaker 300:11:12Delivery service revenues, which correspond to 14% of total revenues, nearly doubled year on year. This was mainly due to the solid momentum in our off platform business coupled with annual rises in unit delivery service charges above inflation. Our advertising services revenues doubled during this period as well. Meanwhile, other revenue lines grew by 100 and 48%. Such performance was mainly through 4 fold growth in loyalty subscription revenues and higher fulfillment service revenues compared to quarter 1 2023. Speaker 300:11:51On the margin side, adjusted for inflation, we recorded 1.2 percentage points rise in the gross contribution margin reaching 10.5%. Margin improvement was mainly attributable to higher contribution of delivery service revenues from off platform as well as advertising revenues. Let's move on to our EBITDA performance on the next slide. We recorded 0.8% EBITDA as a percentage of GMV in quarter 1 2024 with 75 basis points improvement on a yearly basis. This was mainly through 1.2 percentage point rise in gross contribution margin, partially offset by 0.5% rise in shipping and packaging expenses. Speaker 300:12:42And now let's look at our cash flow dynamics in the next slide. The cash generated from operations was TRY 1,500,000,000 in quarter 1, 2020 4, up from TRY 102,000,000 a year ago. TRY778,000,000 improvement in the change in net working capital year on year accounts for more than half of the increase. Others include TRY 277,000,000 increase in EBITDA, TRY147 1,000,000 increase in the change in operating monetary gain, TRY126 1,000,000 increase in other cash items and RMB 26 1,000,000 increase in realized FX gains. With RMB426 6,000,000 in CapEx, our free cash flow was around TRY 1,000,000,000 in quarter 1, 2024. Speaker 300:13:41Let's move on to the next slide and let's take a look at our key takeaways. We would like to leave you with the following from today's presentation. Our robust top line growth in the Q1 exceeded our guidance. Adjusted for inflation, we recorded 42.5 percent GMV growth on a year on year basis. Our gross contribution margin continued to improve by 1 point 2 percentage points and reached 10.5%. Speaker 300:14:14We recorded TRY 289,000,000 EBITDA corresponding to a 0.75 percent rise in EBITDA as a percentage of GMV. With this performance, we generated a strong free cash flow of TRY 1,000,000,000. Our solid overall performance confirms our sharp focus on winning with loyalty, cultivating our sustainable differentiator and expanding our B2B services as a turnkeyecom solution partner for merchants. As we reflect on the good start to 2024, we are committed to growing on a sustainable and profitable manner going forward. Thank you for listening. Speaker 300:14:58We can now open the lines for questions. Operator00:15:46The first question comes from the line of Gusevary Moheram with Kona Capital. Please go ahead. Speaker 400:15:52Okay. Thank you very much for the presentation. My question will be regarding the 8th whole day that's moving from 3Q to 2nd Q3 this year. What was the impact on the GMV for the Q2 in Jorgen? Thank you. Speaker 300:16:09The impact of the 8 holiday is actually incorporated in our quarter 2 guidance. As you know, we had 2 8 holidays in quarter 2, both of which are already incorporated in our top line guidance. Speaker 400:16:28Understand that. But my question is, if the Aetol Day would stay in the Q3, what would be the GMV growth for this quarter? Speaker 300:16:42This typically impacts our business during holidays, offline sales go up and online sales are impacted. So probably if one was in July, we would have at least a percentage or 2 upwards in the growth trajectory. Speaker 400:17:13Okay. Thank you very much. Operator00:17:32Ladies and gentlemen, there are no further audio questions at this time. We will now proceed with the written questions from our webcast participants. The first webcast question comes from Asif Sattar, who is a Private Investor and I quote, what is our market share in the online retailing in Turkey? We operate in the category in the market. How is our performance versus strong competition Amazon in Turkey? Operator00:18:03Thank you. Speaker 200:18:05Dear, Rasev, thank you so much for your question. We will not be able to give a conclusive comment. But from the public data like FNA, active customer usage, we are seeing that they are still staying as a very small player in Turkey. That's number 1. Number 2 is how we are looking into different segments that we have right to win. Speaker 200:18:40Obviously, number 1 is electronics. We get GSK data in Cuba. We have significant share growth. We are already around 32%. On top of this, we gained share in all of our key categories. Speaker 200:18:56The other data source we look into is Nirstand for non electronics categories. As you guys know, home and mom and baby are very critical segment for us. The needs of the female households, we have like to win that. We are winning share that. For home products, other home products, we are also trying to creating different data sources, and we are seeing that we are gaining significant share there as well. Speaker 200:19:27So overall, we had a strong quarter. We are not able to share exact online share in Turkey because it's not reported, but we are clearly beating our competitors with the share. Operator00:19:50The next webcast question comes from Maximy Nekrasov with Citi and I quote, in what categories do you see higher slowdown starting from Q2 2024? Do you see consumers trading down or decreasing frequency? Speaker 200:20:10Maarten, thank you so much. So generally, the slowdown, we can say it started. The critical part is endurable. And endurable is when you dive deeper, number 1 category I would call out is computer. As you know, computer is more discretionary and there is some deferrals of the demand, delayed demand. Speaker 200:20:37The other one has been TV among our categories, which we are expecting some recovery with Europe and Olympics demand in Q3 as well. The trend we are seeing is trading down and deferral of the demand rather than significantly decreasing frequency of online shopping. Thank you, Max. Operator00:21:07The next webcast question is our follow-up question from Maxim Nekrasov. And I quote, when do you expect to start booking tax expenses? Speaker 300:21:18Sure. I'll take this question. We do not expect to pay corporate taxes in 2024 as we have tax incentives and these are typically our R and D standard tax incentives without any time constraints. And most likely, we will start paying taxes in 2026. Operator00:21:45Next webcast question is again a follow-up question from Asif Sattar, who is a private investor and I quote, what is our EBITDA margin on U. S. GAAP basis in this quarter? And what is expected EBITDA on U. S. Operator00:21:59GAAP basis forecasted for the next quarter? Thank you. Speaker 300:22:04We do not report our financials in U. S. GAAP basis. Operator00:22:14The next webcast question is from Badar Shamim with Generation PMCA Corporation. And I quote, any plans to grow your services in developed markets, including North America? Speaker 200:22:30We don't have plans at the moment, but are to expand Hepta Bora and launch in North America. Having said that, Turkish collection is very, very popular in different parts of the world. We started doing some tests with integrations to other marketplaces to do facilitate micro exports from Turkey. So if you go to Walmart today, you can see our private label, June, already being sold in those stores. And we will continue to expand our cross border services with smart integration versus large investments to this new market. Operator00:23:19The next webcast question is a follow-up question from expected incremental GMV increase due to Jumia and partnership in this year? Thank you. Speaker 200:23:35Look, Asif, we are very, very excited about Jumia partnership. First, let me tell that Mina is the region for Turkish collections. We are winning in home category in Turkey, small domestic appliances that are exportable. And Jumia has seen a huge potential in building this partnership with us. We are still in the building phase. Speaker 200:24:00I am expecting most of the impact to come starting to come next year, Arce, because we are entering fulfilled by Jumia. So we are doing the first shipment. It will take some time for this product to be inbound. We are selecting very, very cost efficient basis to win Jumia and with relevant customers. So nothing significant this year, but definitely watch this space for improvement next year as we complete our integration and leverage their existing traffic of different partners. Operator00:24:45The next webcast question comes from Grant Felgenhauer, who is a Private Investor and I quote. Are you considering a local equity listing in Turkey? Thank you. Speaker 200:24:57So we recognize the potential benefits that a dual listing could bring very well, and we are actively exploring various options to determine the best course of action for our stakeholders. As part of this process, we are evaluating market conditions as well as regulatory requirements involved in adjo listing. At this point, we haven't made a concrete decision regarding a potential listing in Warsaw, Istanbul, but we will keep the market informed as we progress and make any definitive decision. In the meantime, we appreciate your continued support. Operator00:25:38The next webcast question comes from Sinanci with Amber Road Investors and I quote, now what drives management's confidence that it will continue to grow share as global cross border e commerce platforms consider entering the Turkish market? Thank you. Speaker 200:25:56Thank you, Sinan. I think there are a couple of things that gives us confidence that we will sustain and continue to grow share despite global cross border platforms. Number 1, Turkey has a very, very competitive supplier base. As you look into this global cross border success story, absolutely, they have strong playbooks, but they don't have competition like Turkish Station at Home, very, very economical. 2nd, affordability is critical solution for Turkey. Speaker 200:26:33We are the only online company which has the payment license, which can do installments in categories like automatic, SMCG, mobile phone. 3rd, quality meter sell off. In Turkey, this is still number 1 purchase intent driver for Turkish online shopping. And as you know, we are winning with all of our quality metrics. We are year over year NPS champion in Turkey. Speaker 200:27:06So we are up for competition. We appreciate the new entrants that will continue to raise the bar for Turkish customers. We have strong rights of it. And finally, we are also building cross border capabilities, which is passing us. So we just launched our first product in a test environment in Namche. Speaker 200:27:32We signed some partnership with Jumia to build some business together. So we will also grow our cross border business as we grow our Turkish business as well. Operator00:27:50The next webcast question is from James Hayes with Lucerne Global Capital and it's a series of questions and I quote. Initiatives, which may constrain the activities of the larger competitor in the market? 2nd question is, which are the items which have only kicked in early 2025? And are there any additional regulations to take effect later this year? 3rd and final question is, finally, the free cash flow in the quarter was quite impressive. Operator00:28:30Can you provide any medium term thoughts around free cash flow generation capacity or for the full year of 2024? Thank you. Speaker 200:28:40Thank you, James. Very good question. So to quantify, there will be various regulatory initiatives that will constrain the activities of the larger competitor in Turkey. Multiple things. Number 1 is license fee is kicking in in Turkey. Speaker 200:29:01So for the large, largest online player, which has disproportionate share, There will be significant amount of payment to make as license fee to the government. The secondary is, as you know, private label, which was a stronghold of Alibaba in Turkey is banned. We are expecting that there will be continued impact as of 2025. The continued impact of advertising promotion reductions will also have an impact. So these are the 3, I would say, that we say much more democratic environment in Turkey. Speaker 200:29:47This is supporting small, medium sized enterprises could continue to make an impact on the large competitor in the market. And for your cash related questions, I want to turn the floor to Tej Gan. Speaker 300:30:04Thank you so much for the question. As you know, there are 2 components for the free cash flow generation. 1 is EBITDA and the other one is net working capital management. We will continue to grow our EBITDA year over year on a full year basis as well. So definitely, we will be improving on this key pillars of the cash flow for the full year. Speaker 300:30:31On the net working capital side, what I can say that as the higher interest rates and the government actions to minimize the inflation has started to take bigger impact in the market. All companies will be looking into their working capital requirements with increased focus. But we will always continue to be a negative net working capital business. So as our business continues to grow in the top line, this will also be the 2nd layer and the key to increase our free cash flow. So that can be some seasonality impact from one quarter to another. Speaker 300:31:25But on a full year basis, we will continue to improve our free cash flow position in 2024.Read morePowered by