D-Market Elektronik Hizmetler ve Ticaret A.S. Price & Performance (HEPS)

Thanks, operator. Thank you very much for joining us today for HEP Subaru's fourth quarter and full year 2024 earnings call. I am pleased to be joined on the call today by our CEO, Nidhan Amalgiok Chetikin and our CFO, Sitkin Kusola. The following discussions reflect management's views as of today's date only. 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. 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 six ks our Form 20 F filed with the SEC on April 30, 2025, and other SEC filings for information on 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 reconciliations. As a reminder, a replay of this call will be available on our Investor Relations website.

With that, I hand over to our CEO, Nithan. Thank you, Gerard. Welcome, everyone, and thank you for joining us. I'm delighted to be with you today to present our fourth quarter and full year results. We concluded '24 with growth and margin expansion through diligent execution of our fundamentals. Notably, we delivered a real GMV growth 12.1% in 2024. And we also achieved gross contribution at 11.3% with a 2.1 percentage point improvement on a yearly basis in twenty ot. Our EBITDA as percentage of GMV continued its percentage expansion reaching 1.1% with a 0.7 percentage point rise year on year. On an unadjusted inflation basis, our GMV grew 74% year on year and EBITDA as a percentage of GMV reached 2.1%. Now I'd like to go into the performance of our operational metrics during the year. Our customers and merchants are always at the core of our and we work hard to improve our value proposition for that. In line with our customer centric approach, we improved our reliability speed and convenience of our logistics services as well as payment convenience with our diverse lending solution. Our active customers grew by 235,000 to 12,200,000. Our orders have shown 16 percentage points year on year growth, resulting in 131,400,000 orders and our order frequency over last twelve months reached 10.8 up by 14%.

On merchant side, we enhanced our logistics two manhandling fintech and advertising solutions. With an active merchant base of over 100,000, we continue to onboard additional brands particularly in the life cycle category. Let me now elaborate on our achievements in Cervantes Barn. In line with our profitable growth strategy, we remain focused on three priorities. Customer loyalty, cultivating the sustainable differentiator Heptiget and Heptipe and finally, expanding our B2B services to Ofpi platform as a turnkey e comm solution partner for merchants. In early Seventha four, we set clear targets for each of these strategic priorities and now I'm pleased to share the progress we make throughout the year. First, our loyalty program helps towards a premium. The program continue to register increase customer loyalty, reaching to 3,700,000 member base. Enhancing the program offerings we signed a partnership with Warner Bros Discovery in 2024 and content provided as part of premium program benefits has widely expanded. Our next strategic priority has been our delivery services. Central to achieving this is help suggest widened the net penetration within our merchant base. Whereby it delivered 72% of total parcels, the special during the year. [indiscernible] commitment to differentiation through our service excellence confirming its integral role in our delivery ecosystem.

Next slide, please. Now let's move on to our next strategic which is capitalizing on our differentiation through lending solutions. Our lending solutions include in house buy now pay later, in house consumer finance loans, shopping loans from partner banks and general purpose loans from our partner Over the last twelve months, our total landing volume reached 16,200,000,000.0, which is 2.6x of the total volume in Cervantes three. Overall, our BNPS consumer finance loans and shopping loans were utilized in over 3,300,000 orders since their launch. Next slide, please. Our fourth key priority is offering strong capabilities to our merchants. Let me start with PepsiJet. With over 40,000,000 parcels delivered in Cavantipur, Hexjet increased its off platform volume by 8% to 9% year on year. Accordingly, twenty four is off platform share rose by 9.7 percentage points year on year so nearly 34.6% of its total volume. Next, I would like to talk about Hefzipay's one click out solution. Pay with HeftyPay. We continue to expand its convenience solution to other retailers. And all our merchants. Hefzipay is now integrated with 140 key accounts by end of twenty four. For all of our strategic priorities, solid progress in our KPI throughout the year reflects the dedicated performance of and strong execution by Entyre Epstein Barratt Group T. Let me say a few words on early twenty twenty five.

Start of twenty twenty five was very challenging due to ongoing macroeconomic headwinds pressuring purchasing power of our consumers as well as boycotts against shopping starting March. Our marketing activities were also limited in all part performance channels due to political sensitivity and the level of focus in the first quarter. Of the year. However, as you know, we also had a very positive milestone for HEPTIBURA after twenty five years. On January 29, closing of the transaction between CASFI and our founder, the members of D-one family, to purchase a 65.4% controlling stake in Efseborazovaz now. We are extremely excited about the potential value creation of opportunities that arise from this deal as CASB is the preeminent payment marketplace and fintech ecosystem. In Kazakhstan. With this, I thank you for listening and leave the floor to Sachin kin, our CFO, to provide further insights into our financial performance.

Thank you, Nihon, and welcome everyone.

I'm delighted to be with you today to present our fourth quarter and full year results. On an unadjusted for inflation basis, our GMV grew by 49.4% close to our guidance of 50% to 55%. And our EBITDA as a percentage of GMV reached 1.8% in line with our guidance of 1.8% to 2% in the fourth quarter. Adjusted for inflation, our GMV rose by 12.1% in 2024 compared to full year 2023. On the profitability side, our gross contribution margin rose to 11.3% with a 2.1 percentage point improvement compared to last year. Our EBITDA as a percentage of GMV rose to 1.1% for the full year. This is a 0.7 percentage point rise year on year. Let's go over the details of this performance. In 2024, 12.1% of real GMV growth came through 31,400,000 orders, and a higher average order value. Excluding our digital products, our order growth was at around 08/2024 compared to the previous year.

Average order value growth was around 4% due to a faster than inflation rise in the average selling prices. During 2024, we saw a 2.9 percentage point shift towards our marketplace operations compared to 2023, and our 3P operations corresponded to around 70% of our business.

This shift came as a result of a 2.9 percentage point shift towards non electronics which is in line with our broader strategy. Let's have a look at our revenue and gross contribution dynamics. First, some color on revenues. Our revenue grew by 6.4% in quarter four, bringing our revenue growth for the full year to 11.1% compared to the same periods of last year. Our revenue growth in quarter four was mainly due to a 15 percentage rise in 3P revenue, 18% increase in delivery service revenue, and 127% increase in other revenue. These were partially offset by the 1.6 percentage decrease in our 1P revenue as a result of the shift in GMV towards 3P compared to quarter four twenty twenty three. Our revenue growth in 2024 was mainly due to the 50% increase in delivery revenue, and the 112% increase in other revenue including our advertising services revenues, and Hepsibrother premium subscription revenues. 12% revenue growth in marketplace operations also contributed to our overall revenue growth in 2024. The gross contribution margin improved by 2.1 percentage points to 11.3%, in 2024 compared to last year. This margin improvement was mainly attributable to increased delivery service revenue higher other revenue including ads and premium subscription revenue, together with an increase in the 1P margin.

Let's move on to our EBITDA performance on the next slide. We recorded 1.1% EBITDA as a percentage of GMV in 2024, with a 0.7 percentage point yearly improvement. Excluding the one off items in 2023, year on year improvement in EBITDA was at 0.9 percentage point for the full year 2024. This 0.7% improvement was driven by a 2.1 percentage rise in gross contribution margin partially offset by 0.5 percentage rise in payroll and outsource staff expenses, 0.4 percentage rise in shipping and packaging expenses, 0.2 percentage rise in advertising expenses and 0.3 percentage rise in other operating expenses. The rise in payroll and outsourced staff expenses came from the annual and mid year salary rises along with the rise in employee number for our subsidiary. The increase in shipping and packaging expenses as a percentage of GMV was mainly driven by higher parcel volume and the rise in delivery fees per unit combined with annual minimum waging. Increases. The increase in other operating expenses was mainly due to the recognition of provision for the license fee amounting to 180,000,000, and higher bad debt provisions in 2024. Next, let's have a look at our cash flow dynamics. For full year 2024, free cash flow decreased by SEK 1,900,000,000.0 compared to a year ago.

This decrease was mainly due to a TRY $1.05 5,000,000,000 decrease in net cash provided by operating activities and 340,000,000.00 increase in CapEx. With TR2 billion in CapEx, our free cash flow was TRY 3,700,000,000.0, for the full year 2024. With this, I will now hand over to Nilhan for the key takeaways.

We leave you with the following key takeaways from today's presentation. For the year 2024, we recorded real double digit GMV growth of 12.1%. Supported by 2.1 percentage points rising gross contribution Our EBITDA reached EUR 2,100,000,000.0, corresponding to 1.1% of GMV in 2024. On Q1, we had two important developments.

On one side, the year started with macroeconomic headwinds, pressuring the purchasing power of consumers and boycotts started against shopping. On the other, which is positive side, an important milestone in the company's history to place on twenty nine January. Under CASTIO ownership, are excited about the opportunities we foresee going forward. With this, I would like to thank you all for listening Today, we don't have a Q and A. But we are much looking forward to connecting with you and your questions. Please direct them to our Investor Relations. Thank you.

Ladies and gentlemen, the has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.