Q4 & FY 2024 Results Presentation April 30, 2025 Disclaimer Restatement of Financial Information Pursuant to the International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies ("IAS 29"), the financial statements of entities whose functional currency is that of a hyperinflationary economy must be adjusted for the effects of changes in a general price index. Turkish companies reporting under International Financial Reporting Standards ("IFRS"), including the Company, have been requi ...

ISTANBUL, May 08, 2025 (GLOBE NEWSWIRE) -- D-MARKET Electronic Services & Trading (d/b/a “Hepsiburada”) (NASDAQ: HEPS), a leading Turkish e-commerce platform (referred to herein as “Hepsiburada” or the “Company”), today announces its unaudited financial results for the first quarter ended March 31, 2025. Restatement of financial information: Pursuant to the International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”), the financial statements of entities whose function ...

Core Viewpoint - Hepsiburada, a leading Turkish e-commerce platform, has successfully completed its fourth bond issuance through its subsidiary Hepsi Finansman A.Ş., raising a nominal value of TRY 66,950,000 to support the growth of its consumer finance business [1][2]. Group 1: Bond Issuance Details - Hepsifinans closed its fourth bond issuance on April 30, 2025, with an aggregate principal amount of TRY 66,950,000 and a six-month maturity [2]. - The bonds will accrue interest at a rate of 52.00% per annum, with both principal and coupon to be repaid at maturity [2]. - This issuance is part of a larger approval from the Capital Markets Board for Hepsifinans to issue bonds or bills totaling up to TRY 1,050,000,000 within one year [2]. Group 2: Company Overview - Hepsiburada operates as a hybrid e-commerce platform combining first-party direct sales and a third-party marketplace, featuring approximately 100,000 merchants [4]. - The platform offers a wide range of services including last-mile delivery, fulfillment services, advertising solutions, cross-border sales, payment services, and affordability solutions [5]. - Hepsiburada's fintech platform, Hepsipay, enhances shopping convenience with secure payment solutions, including digital wallets and buy now pay later options [5]. Group 3: Social Impact - Since its founding in 2000, Hepsiburada has focused on empowering women in the Turkish economy, launching initiatives like the 'Technology Empowerment for Women Entrepreneurs' program, which has supported around 61,000 female entrepreneurs [6].

Group 1 - The conference call is focused on discussing Hepsiburada's fourth quarter and full year 2024 financial results [1][3] - Participants in the call include CEO Nilhan Onal Gokcetekin and CFO Seçkin Köseoğlu [2][3] - The call is recorded and participants are in a listen-only mode [1] Group 2 - The management's views presented during the call are as of the current date and are subject to change [4] - Forward-looking statements are made, with a caution that actual results may differ materially [4] - References to non-IFRS measures will be made, with guidance to the appendix for comparable IFRS measures [5]

D-Market Elektronik Hizmetler ve Ticaret (HEPS) Q4 2024 Earnings Call April 30, 2025 09:00 AM ET Company Participants Ceren Tuzcu Seyhunlu - Corporate Strategy & IR Group DirectorNilhan Onal Gökçetekin - Chief Executive OfficerSeçkin Köseoğlu - CFO Operator Ladies and gentlemen, thank you for standing by. I'm Vasilios, your Chorus Call operator. Welcome and thank you for joining the Hep C Burada Conference Call and the live webcast to present and discuss the Fourth Quarter and Full Year twenty twenty four F ...

D-Market Elektronik Hizmetler ve Ticaret (HEPS) Q4 2024 Earnings Call April 30, 2025 09:00 AM ET Company Participants Ceren Tuzcu Seyhunlu - Corporate Strategy & IR Group DirectorNilhan Onal Gökçetekin - Chief Executive OfficerSeçkin Köseoğlu - CFO Operator Ladies and gentlemen, thank you for standing by. I'm Vasilios, your Chorus Call operator. Welcome and thank you for joining the Hep C Burada Conference Call and the live webcast to present and discuss the Fourth Quarter and Full Year twenty twenty four F ...

Financial Data and Key Metrics Changes - The company reported a real GMV growth of 12.1% in 2024, with an unadjusted inflation basis GMV growth of 74% year on year [6][7] - Gross contribution margin improved to 11.3%, reflecting a 2.1 percentage point increase compared to the previous year [7][18] - EBITDA as a percentage of GMV reached 1.1%, marking a 0.7 percentage point rise year on year [7][18] - Revenue grew by 11.1% for the full year, with a 6.4% increase in Q4 [20][24] Business Line Data and Key Metrics Changes - Active customers increased by 235,000, totaling 12.2 million, with orders growing by 16 percentage points year on year to 131.4 million [8][18] - The company saw a shift towards marketplace operations, with 3P operations accounting for approximately 70% of the business [19] - Delivery service revenue increased by 50% in 2024, contributing significantly to overall revenue growth [21][22] Market Data and Key Metrics Changes - The company faced macroeconomic headwinds in early 2025, impacting consumer purchasing power and marketing activities [15][25] - The company is excited about the potential value creation opportunities from the acquisition of a 65.4% controlling stake in a leading payment marketplace in Kazakhstan [15][26] Company Strategy and Development Direction - The company focuses on three strategic priorities: enhancing customer loyalty, improving delivery services, and expanding B2B services [9][12] - The loyalty program has grown to 3.7 million members, and partnerships have been established to enhance program offerings [10] - The company aims to capitalize on differentiation through lending solutions, with total lending volume reaching 16.2 billion, a 2.6 times increase from 2023 [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic conditions and political sensitivities affecting marketing efforts [15][25] - The acquisition of a controlling stake in a prominent fintech ecosystem is seen as a significant milestone, providing optimism for future growth [15][26] Other Important Information - Free cash flow decreased by 1.9 billion compared to the previous year, primarily due to a decline in net cash from operating activities [24] - The company recorded a significant increase in other revenue, including advertising services and premium subscription revenues [21][22] Summary of Q&A Session - There was no Q&A session during this earnings call, and participants were encouraged to direct their questions to the Investor Relations team [26]

Core Insights - Hepsiburada reported its unaudited financial results for Q4 2024 and audited results for the full year ended December 31, 2024, showing growth in gross merchandise value (GMV) and revenue despite macroeconomic challenges [1][4][6]. Financial Performance Highlights - Q4 2024 GMV increased by 1.9% to TRY 59.0 billion compared to TRY 57.9 billion in Q4 2023, while IAS 29-unadjusted GMV rose by 49.4% to TRY 58.2 billion [4][20]. - Revenue for Q4 2024 grew by 6.4% to TRY 18,140.8 million from TRY 17,053.9 million in Q4 2023 [4][34]. - Full year 2024 GMV increased by 12.1% to TRY 188.6 billion compared to TRY 168.3 billion in 2023, with IAS 29-unadjusted GMV rising by 73.8% to TRY 167.7 billion [6][21]. - EBITDA for Q4 2024 surged by 283.5% to TRY 714.9 million compared to TRY 186.4 million in Q4 2023, with EBITDA as a percentage of GMV improving to 1.2% [4][12]. Customer and Order Metrics - Active customers increased by 2.0% to 12.2 million as of December 31, 2024, compared to 11.9 million in the previous year [4][13]. - The number of orders decreased by 3.4% to 33.3 million in Q4 2024 compared to 34.4 million in Q4 2023 [4][13]. Strategic Developments - The company announced a significant change in control with Kaspi.kz acquiring a 65.4% stake in Hepsiburada, which is expected to create value opportunities [11]. - Hepsiburada's logistics service, HepsiJet, delivered 72% of all parcels handled through the platform in 2024, up from 67% in 2023 [8][25]. Revenue Breakdown - In Q4 2024, marketplace revenue (3P) increased by 14.8% to TRY 2,126.0 million, while delivery service revenue rose by 17.7% to TRY 2,159.5 million [34][37]. - Other revenue, including advertising and fintech operations, saw significant growth, with a 126.5% increase in other revenue in Q4 2024 [36][40]. Operating Expenses and Profitability - Net operating expenses increased by 3.6% to TRY 17,998.1 million in Q4 2024, with a slight increase in operating expenses as a percentage of GMV [46][47]. - The gross contribution margin improved to 11.4% in Q4 2024, up from 9.0% in Q4 2023, driven by higher other revenue and delivery service revenue [41][42]. Financial Income and Expenses - Financial income for Q4 2024 increased by 28.6% to TRY 1,418.8 million, primarily due to higher interest income on credit sales and time deposits [56]. - Financial expenses rose by 17.7% to TRY 2,683.2 million in Q4 2024, mainly due to increased commission expenses related to early collection of credit card receivables [60].

Financial Reporting and Accounting - The company's consolidated financial statements are presented in Turkish Lira, reflecting a restatement pursuant to IAS 29 due to hyperinflation, with a conversion factor of 1.00 for December 31, 2024, and 1.44 for December 31, 2023[24]. - The company applies IAS 29 for financial statements due to a cumulative inflation rate exceeding 100% in Türkiye as of February 28, 2022[23]. - The company has implemented IAS 29 inflation accounting since 2022, significantly impacting gross contribution levels due to inflation adjustments[58]. - The company's financial performance is impacted by inflation rates, as it factors monthly inflation into its financial reporting under IAS 29[97]. - The company has identified material weaknesses in its internal control over financial reporting, which could impair its ability to accurately report results and meet reporting obligations[209]. - Material weaknesses in internal control over financial reporting were identified, particularly in IT general controls, which remain unremediated as of December 31, 2024[200][202]. Revenue and Profitability - In 2024, the company incurred a net loss of TRY 1,604.9 million compared to a net income of TRY 109.1 million in 2023 and a net loss of TRY 6,916.7 million in 2022, primarily due to investments in core business expansion and strategic assets[58]. - The company's net income generation in 2023 was mainly driven by monetary gains from a net monetary position, where monetary liabilities exceeded monetary assets[58]. - The company anticipates continued net losses in the near term due to a challenging macroeconomic environment affecting customer purchasing power and ongoing capital expenditures[58]. - The company may not achieve or maintain operational profitability in the near term due to various challenges[61]. - The company needs to generate and sustain increased revenue and gross contribution levels to outpace growing operating expenses and capital expenditures to achieve operational profitability[58]. Customer and Merchant Metrics - Active Customers are defined as users who have purchased at least one item within the last 12 months, including returns and cancellations[37]. - The Active Customer base as of December 31, 2024, was 12.2 million, showing no growth compared to 2022, while it increased from 11.9 million in 2023[83]. - The company reported a significant increase in the number of Active Merchants, who sold at least one item within the last 12 months[37]. - The number of Active Merchants as of December 31, 2024, was 100.2 thousand, a decrease from 101.5 thousand in 2023 and an increase from 99.7 thousand in 2022[85]. Strategic Initiatives and Growth - The company launched the Hepsiburada Premium loyalty program on July 1, 2022, replacing the previous Loyalty Club program[25]. - The Hepsipay Wallet was launched in June 2021 as part of the company's strategic asset[25]. - The company is focused on expanding its logistics operations and financial services operations as part of its growth strategy[58]. - Significant investments are required for expanding the company's platform, workforce, and fulfillment infrastructure to support growth in new products and services[63]. - The company anticipates continued growth in its market position and customer base, despite the risks associated with hyperinflation and market volatility[39]. Regulatory and Compliance Risks - The company is subject to various legal and regulatory risks that could materially affect its business operations and financial condition[54]. - The company faces uncertainties regarding the growth and profitability of the e-commerce industry in its region, which could adversely affect its business[143]. - The company anticipates significant operational and financial resources will be required to comply with existing and new regulations, which may adversely impact its business and financial condition[176]. - The company is currently undergoing tax audits for the financial year 2022, which may result in additional tax liabilities[150]. - The introduction of a withholding tax of 1% on merchants selling through the company's platform will take effect from January 1, 2025, increasing compliance risks[153]. Competition and Market Environment - The company operates in competitive markets and may struggle to compete effectively in the future[51]. - The competitive landscape is intensifying, with challenges from both online and offline retailers, which may hinder the company's growth and market position[76]. - The company’s revenue growth may slow down or decline due to various factors, including competition and changes in consumer behavior[96]. - Inflation trends and changes in monetary policy in Turkey are expected to adversely affect consumer demand and order growth, potentially leading to negative real GMV growth[60]. Cybersecurity and Data Protection - The company experienced a cybersecurity incident in February 2024, affecting approximately 673 merchant accounts, which is less than 0.7% of Active Merchants as of December 31, 2023[104]. - Customer data was downloaded from merchant accounts for approximately 7,200 customers, representing about 0.06% of Active Customers as of December 31, 2023[104]. - The Turkish Personal Data Protection Authority imposed an administrative fine of TRY 3,453,775 due to the company's failure to prevent data breaches[105]. - The company has implemented measures to enhance security protocols following the cybersecurity incident, including suspending and resetting passwords for compromised accounts[104]. Financial Services and Payment Solutions - Hepsipay processed over 90% of all card payments in December 2024, highlighting its dominance as a payment service provider[115]. - The company launched a "Buy-Now-Pay-Later" solution and expanded its consumer finance offering in early 2024, which may expose it to credit risk from borrowers[116]. - Hepsipay faces increasing competition from established companies and fintech firms, impacting its market penetration and profitability[117]. - Hepsipay's creditworthiness assessment may fail to accurately represent borrowers' financial conditions, increasing the risk of loan impairments[118]. Legal and Litigation Matters - Hepsiburada paid $13.9 million to resolve class action lawsuits related to its ADSs, with TurkCommerce B.V. contributing $3,975,000 towards the settlement[190]. - The Turkish Capital Markets Board imposed a "board registration fee" exceeding TRY 60.1 million on Hepsiburada, which was contested in court but ultimately upheld[191]. - The company has incurred significant management time and costs in addressing compliance with Sarbanes-Oxley Act requirements, impacting operational efficiency[204]. - Ongoing litigation may increase as the company expands its business, potentially leading to higher exposure to claims and lawsuits[189]. Economic and Political Risks - Political instability in Türkiye has led to a depreciation of the Turkish Lira, which may adversely impact the company's financial condition and results of operations[214]. - The company derives substantially all of its revenue from operations in Türkiye, making it significantly affected by the economic activity and political stability in the region[213]. - Political protests and boycotts in Türkiye may directly and indirectly affect the company's business operations and revenue[214]. - The company faces risks associated with doing business in an emerging market, which could adversely affect capital flows to Türkiye and its stock price[213].

Core Viewpoint - Hepsiburada, a leading Turkish e-commerce platform, has filed its annual report for the fiscal year ended December 31, 2024, with the SEC, highlighting its ongoing commitment to transparency and investor relations [1]. Company Overview - Hepsiburada operates as a hybrid e-commerce platform combining first-party direct sales and a third-party marketplace, featuring approximately 100,000 merchants [3]. - The company aims to lead the digitalization of commerce in Türkiye, providing a wide range of services including last-mile delivery, fulfillment services, advertising solutions, cross-border sales, payment services, and affordability solutions [4]. Financial Reporting - The annual report includes audited consolidated financial statements and is available for shareholders and ADS holders upon request [2]. Social Impact - Since its inception in 2000, Hepsiburada has focused on empowering women in the Turkish economy, notably through its 'Technology Empowerment for Women Entrepreneurs' program, which has supported around 61,000 female entrepreneurs [5].