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 third quarter ended September
30, 2023.
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 required to
apply IAS 29 to their financial statements for periods ended on and
after June 30, 2022.
The Company’s consolidated financial statements
as of and for the three months ended September 30, 2023, including
figures corresponding to the same period of the prior year, reflect
a restatement pursuant to IAS 29. Under IAS 29, the Company’s
financial statements are presented in terms of the measuring unit
current as of September 30, 2023. All the amounts included in the
financial statements which are not stated in terms of the measuring
unit current as of the date of the reporting period, are restated
applying the general price index. Adjustment for inflation has been
calculated considering the price indices published by the Turkish
Statistical Institute (TurkStat). Such indices used to restate the
financial statements as at September 30, 2023 are as follows:
Date |
Index |
Conversion Factor |
30 September 2023 |
1,691.0 |
1.00 |
31 December 2022 |
1,128.5 |
1.50 |
30 September 2022 |
1,046.9 |
1.62 |
Figures unadjusted for inflation in accordance
with IAS 29, denoted as “IAS 29-unadjusted”, “unadjusted for IAS
29”, “unadjusted”, “unadjusted for inflation”, or “without
adjusting for inflation”, are also included in the summary tables
of the consolidated financial statements and under the “Highlights”
section and explanatory notes as relevant. The press release also
includes tables that show the IAS 29 adjustment impact on the
consolidated financial statements for the periods under discussion.
Figures unadjusted for IAS 29 constitute non-IFRS financial
measures. We believe that their inclusion facilitates the
understanding of the restated financial statements in accordance
with IAS 29 and our year on year growth and profitability guidance.
Please see the “Presentation of Financial and Other Information”
section of this press release for a definition of such non-IFRS
measures, a discussion of the limitations on their use, and
reconciliations of the non-IFRS measures to the most directly
comparable IFRS measures.
Third Quarter 2023 Financial and
Operational Highlights(All financial figures are
restated pursuant to IAS 29 unless otherwise
indicated)
- Gross
merchandise value (GMV) increased by 45.1% to TRY 25.7
billion compared to TRY 17.7 billion in Q3 2022.
- IAS 29-Unadjusted
GMV increased by 126.2% to TRY 24.3 billion compared to Q3
2022.
-
Revenue increased by 52.0% to TRY 8,057.4 million
compared to TRY 5,300.1 million in Q3 2022.
- Number of
orders increased by 55.1% to 27.0 million compared to 17.4
million orders in Q3 2022.
- Active
Customers increased to 12.0 million compared to 11.8
million as of September 30, 2022.
- (Order)
Frequency increased by 59.3% to 8.6 compared to 5.4 as of
September 30, 2022.
- Active
Merchant base increased by 7.2% to 101.1 thousand compared
to 94.3 thousand as of September 30, 2022.
- Number of
SKUs increased by 45.2% to 210.6 million compared to 145.0
million as of September 30, 2022.
- Share of
Marketplace GMV was 65.5% compared to 68.2% in Q3
2022.
-
EBITDA improved to positive TRY 87.9 million
compared to negative TRY 1,030.7 million in Q3 2022. Accordingly,
EBITDA as a percentage of GMV was at 0.3% on a 6.2 percentage
points improvement compared to Q3 2022.
- IAS 29-Unadjusted
EBITDA improved to positive TRY 644.0 million compared to negative
TRY 450.8 million in Q3 2022. IAS 29-Unadjusted EBITDA as a
percentage of GMV in Q3 2023 improved 6.9 percentage points to 2.7%
compared to Q3 2022.
- Net
loss for the period was TRY 191.1 million
compared to a net loss of TRY 923.1 million for Q3 2022.
-
Free cash flow was positive TRY 2,006.6 million
compared to positive TRY 534.7 million in Q3 2022.
Commenting on the results, Nilhan Onal
Gökçetekin, CEO of Hepsiburada said:
“We are pleased to announce another robust
quarterly performance, building on our strategic priorities. On an
unadjusted basis, our GMV saw growth of 126% in Q3 2023 compared to
the same period of last year with EBITDA as a percentage of GMV at
2.7%. As the trusted brand of Türkiye's e-commerce sector, our
growth is attributed to our strong customer base and heightened
order frequency. During the third quarter, we generated 27 million
orders which meant a 55% year-on-year increase. This growth was
fueled by Hepsiburada Premium members, exceeding 2 million members
in November. As a consequence, our results have exceeded both our
quarterly GMV growth and EBITDA guidance, and take us one step
closer to a positive full-year EBITDA, unadjusted for
inflation.
During the quarter, and in line with our
customer centricity, we announced an initiative
“HepsiburadaPromise” to emphasize our compelling value proposition
which encompasses next-day delivery, convenient return pick-up
services, and an assurance of authenticated products, among others.
This initiative addresses the primary concerns of Turkish
e-commerce consumers and underscores our commitment to meet their
expectations.
In Q3, we also re-launched our Retail Media
Network (RMN) business, operating under the HepsiAd brand. HepsiAd
is dedicated to providing targeted advertising solutions, and
driving growth for our partners and ourselves.
Our strategic focus on sustainable and
profitable growth is confirmed by our commercial agility despite
volatile macroeconomic conditions. This approach allows us to offer
services such as tailored payment options and affordability
solutions to our customers. With Hepsipay wallet’s user base
reaching 13.2 million in the third quarter, the use of our
buy-now-pay-later solution and shopping loans in collaboration with
our partner banks generated 5.6% of our GMV. Hepsipay’s prepaid
card offering, enabling holders by topping-up to e-wallet through
loans, has reached 708 thousand cards by the end of November. Being
an integral component of our strategy, we continued the expansion
of Hepsipay’s one-click check-out solution, part of our
comprehensive solutions suite for our B2B clients. Meanwhile,
HepsiJet doubled its external client base and external delivery
volume on a year-on-year basis, which corresponded to a quarter of
its total volume.
With another robust “Legendary November” behind
us, we expect to deliver a solid and profitable growth also in the
fourth quarter. In the pursuit of our objectives, we remain
confident in our ability to overcome headwinds and raise the bar in
Türkiye’s e-commerce ecosystem. Our stakeholders’ trust and
collaboration inspire us to reach new heights, and we look forward
to the exciting journey ahead.”
Summary: Key Operational and Financial
Metrics
The following table sets forth a summary of the
key unaudited operating and unaudited financial data as of and for
the three months ended September 30, 2023 and September 30, 2022
and the nine months ended September 30, 2023 and September 30, 2022
prepared in accordance with IFRS. Unless indicated otherwise, all
financial figures in the tables provided are inflation-adjusted (in
accordance with IAS 29).
(in TRY million unless otherwise
indicated) |
Three months ended September 30, |
Nine months ended September 30, |
unaudited |
|
unaudited |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
GMV (TRY in billion) |
25.7 |
17.7 |
45.1% |
69.5 |
51.8 |
34.2% |
Marketplace GMV (TRY in billion) |
16.8 |
12.1 |
39.3% |
46.5 |
34.1 |
36.2% |
Share of Marketplace GMV (%) |
65.5% |
68.2% |
(2.7pp) |
66.9% |
65.9% |
1.0pp |
Number of orders (million) |
27.0 |
17.4 |
55.1% |
78.6 |
46.5 |
69.0% |
Active Customer (million) |
12.0 |
11.8 |
1.5% |
12.0 |
11.8 |
1.5% |
Revenue |
8,057.4 |
5,300.1 |
52.0% |
21,596.7 |
15,786.0 |
36.8% |
Gross contribution |
2,415.0 |
1,478.6 |
63.3% |
6,505.3 |
2,953.2 |
120.3% |
Gross contribution margin (%) |
9.4% |
8.4% |
1.0pp |
9.4% |
5.7% |
3.7pp |
Net income/(loss) for the period |
(191.1) |
(923.1) |
(79.3%) |
654.5 |
(3,527.2) |
n.m. |
EBITDA |
87.9 |
(1,030.7) |
n.m. |
291.0 |
(3,503.9) |
n.m. |
EBITDA as a percentage of GMV (%) |
0.3% |
(5.8%) |
6.2pp |
0.4% |
(6.8%) |
7.2pp |
Net cash (used
in)/provided by operating activities |
2,240.6 |
874.8 |
156.1% |
1,780.7 |
(1,295.1) |
n.m. |
Free Cash Flow |
2,006.6 |
534.7 |
275.3% |
1,041.9 |
(2,211.1) |
n.m. |
Note: The abbreviation “n.m.” stands for not meaningful throughout
the press release. |
|
|
|
|
|
|
Note that Gross Contribution, EBITDA and Free
Cash Flow are non-IFRS financial measures. See the “Presentation of
Financial and Other Information” section of this press release for
a definition of such non-IFRS measures, a discussion of the
limitations on their use, and reconciliations of non-IFRS measures
to the most directly comparable IFRS measures. See the definitions
of metrics such as GMV, Marketplace GMV, share of Marketplace GMV,
gross contribution margin, EBITDA as a percentage of GMV, number of
orders and active customer in the “Certain Definitions” section of
this press release.
Outlook
The below forward-looking statements reflect
Hepsiburada’s expectations as of December 5, 2023, considering year
to date trends which could be subject to change, and involve
inherent risks which we are unable to control or foresee. The
financial outlook is based on management’s current views and
estimates with respect to existing market conditions. However,
there are several uncertainties including the inflationary
environment both in Türkiye and globally, local currency
volatility, low consumer confidence, pressure on purchasing power,
regional geopolitical headwinds, supply chain disruptions, the new
regulatory environment for our activities in Türkiye and the
evolving competitive landscape. Management’s views and estimates
are subject to change without notice. See also the “Forward Looking
Statements” section at the end of this press release.
For the fourth quarter of 2023, we expect to
deliver IAS 29-Unadjusted GMV growth within a range of 93% to 95%
compared to the same period of 2022 and IAS 29-Unadjusted EBITDA as
a percentage of GMV within a range of 0.5% to 1.0%. Consequently,
for the full year 2023, we expect to double IAS 29-Unadjusted GMV
as compared to the full year 2022 and to record IAS 29-Unadjusted
EBITDA as a percentage of GMV of around 1.5%.
We intend to remain focused on sustainable and
profitable growth with a prudent approach to capital
allocation.
Q3 2023 Business and Strategy Highlights
As at the end of September 2023, the rate of
inflation followed a downward trend compared to the third quarter
of 2022 (mainly due to the high base effect) and uptrend compared
to the second quarter of 2023:
-
The annual inflation rate published by TurkStat as of September 30,
2023 was 61.5%, down from 83.5% as of September 30, 2022 and up
from 38.2% as of June 30, 2023. The monthly inflation rates during
the third quarter of 2023 were 9%, 9% and 5% in July, August and
September, respectively. The Consumer Confidence Index declined to
71.5 as of September 30, 2023 compared to 85.1 as of June 30,
2023.
In Q3 2023, IAS 29-Unadjusted GMV increased by
126.2% to TRY 24.3 billion compared to Q3 2022, exceeding our
guidance of around 110% by 16.2 percentage points.
-
For Hepsiburada, GMV growth is a function of the growth in number
of orders and average order value.
-
We achieved continued order growth of 55.1% in Q3 2023 compared to
Q3 2022. Order growth came through the continued rise in order
frequency and customer growth. Our Active Customer base consisted
of 12.0 million as of September 30, 2023 and order frequency (LTM)
grew by 59.3% to 8.6, up from 5.4 as of September 30, 2022. Robust
customer demand for our digital products (which mainly include
sweepstakes and gamified lotteries, plus the first monthly payment
of the Hepsiburada Premium membership subscription) continued to
fuel the rise in order frequency. Excluding the orders of digital
products, order frequency would have been 6.1 as of September 30,
2023 compared to 5.1 as of September 30, 2022, corresponding to
19.7% growth. Accordingly, order growth excluding that of digital
products was 18.3% in Q3 2023 compared to Q3 2022. While these
digital products generated less than 0.5% of our GMV in Q3 2023, we
value the repeat interaction they enable with the participating
customer segments.
-
Meanwhile, average order value grew by 45.8% in Q3 2023 compared to
Q3 2022. Excluding digital products, the average order value grew
by 91.4%, outpacing the annual inflation of 61.5%. The faster
average order value growth is attributable mainly to a 2.2
percentage point shift in the GMV mix towards the electronics
category which has significantly higher value items than
non-electronics. The faster-than-inflation rise in average selling
prices also compounded quarterly growth. While we continue our
growth in non-electronics, during this quarter we also used our
strong 1P (Retail) model to meet the demand in the electronics
market.
-
On July 7 2023, the Turkish government announced an increase in the
value added tax (VAT) applicable to all goods and services from 18%
to 20% (and from 8% to 10% for basic goods) with effect from July
10, 2023. The announcement triggered higher demand for e-commerce
among consumers in Türkiye across all categories. Accordingly,
benefiting from the hype in the market, we recorded a stronger GMV
growth rate in July year-on-year compared to our July performance
in the previous two years.
-
Overall, our performance was also supported by the appeal of our
Hepsiburada Premium loyalty program, attractive affordability
solutions and data-driven marketing campaigns.
-
Adjusted for inflation, GMV increased by 45.1% to TRY 25.7 billion
compared to Q3 2022.
In line with our pledge to customer centricity,
in the third quarter of 2023, we announced the “HepsiburadaPromise”
initiative which is as a marketing campaign to promote certain
customer benefits. As part of this initiative, we communicate our
compelling value proposition that, among others, encompasses
next-day delivery (where we offer a compensation for late delivery
to Hepsiburada Premium members), convenient return pick-up
services, and an assurance of authenticated products in our Retail
operations. We believe this initiative addresses the primary
concerns of Turkish e-commerce consumers while underscoring our
commitment to meeting their expectations.
The discussion below elaborates on our progress
in Q3 2023 within each of our strategic priorities:
a) Nurturing loyalty
-
Central to our strategy is prioritizing customer loyalty and
retention. Our loyalty program, Hepsiburada Premium, plays a key
role in achieving this. Meanwhile, focusing on retention helps us
to reduce and optimize our marketing and advertising spend.
-
Hepsiburada Premium is a paid subscription service where members
enjoy access to a wide range of benefits that include free delivery
and 3% cashback subject to certain conditions, plus free access to
an on-demand streaming service, and discounted services, among
others. This quarter, we built on the program’s offering with
summer special deals and exclusive campaigns. The monthly
subscription fee was increased from TRY 14.9 to TRY 19.9 in October
2023.
-
Based on the results of market research conducted by FutureBright
(a local research company), Hepsiburada Premium members’ Net
Promoter Score (“NPS”) was 81 in Q3 2023. This score is 10 points
higher than the Company’s overall NPS, signifying a strong
satisfaction level among program members.
-
As of the end of Q3 2023, we had a total of 1.5 million Hepsiburada
Premium members (with approximately 800 thousand additional members
joining in the nine-month period) and by the end of November, the
number of members had reached a new milestone of 2 million.
- Hepsiburada
Premium members continue to generate higher order frequency than
non-members. Data for the third quarter of 2023 indicated that the
monthly order frequency for Premium members was 1.4 times the
frequency they had generated before joining the program. Such
frequency figures were 1.8 and 2.6, respectively.
b) Capitalizing on our clear differentiation
with affordability and lending solutions as well as high service
levels on the platform and superior delivery services
-
We are focused on using our sustainable differentiators to provide
our customers with best value through our affordability solutions
(through Hepsipay) and superior delivery services (through
HepsiJet). We believe that our solutions set us apart from the
competition through our commitment to customer satisfaction.
-
In Q3 2023, we had an overall NPS of 71 compared to 73 in Q2 2023
(according to the results of market research conducted by
FutureBright on behalf of Hepsiburada). We believe that our fast
delivery services, wide range of affordability solutions and the
depth and breadth of our selection were instrumental in earning
customer appreciation and trust.
i) Hepsipay
-
Our wallet and payment gateway solution, Hepsipay, registered
approximately 13.2 million Hepsipay wallet customers (representing
users who have opened their wallet account by giving the required
consent to Hepsipay) as of September 30, 2023.
-
We remain the only e-retailer with licenses in payments and
consumer finance, and were the first in the market to launch a
“Buy-Now-Pay-Later” (“BNPL”) solution. Our BNPL solution had been
used by over 245 thousand customers as of September 30, 2023.
Approximately 762 thousand orders were processed through our
non-card affordability solutions (including BNPL and shopping
loans) and around TRY 3.4 billion in loans were given in the twelve
months ending September 30, 2023. In Q3 2023, orders made through
non-card affordability solutions corresponded to a 5.6% share of
total GMV, compared to 3.2% in Q3 2022. We diligently manage credit
risk in our BNPL solution, while maintaining our focus on growth
optimization.
- Following
the launch of the service in May 2023, around 708 thousand Hepsipay
prepaid cards had been issued through the Hepsiburada mobile app as
of November 30, 2023. The Hepsipay prepaid card is linked to the QR
payment feature allowing customers to use it at any off-line
retailer that accepts QR payments. The option for Hepsipay prepaid
card holders to top up their e-wallets by way of general purpose
loans (cash loans) is now available from five leading banks in
Türkiye.
ii) HepsiJet
-
HepsiJet continued offering its competitive services, including
oversized delivery, that differentiate us in the market. We believe
swift delivery is a core customer expectation and, in Q3 2023,
HepsiJet delivered 82% of orders placed through our retail arm (1P)
within the next day (compared to 84% in Q3 2022).
-
HepsiJet continued to invest in expanding its geographical coverage
by including another 80 municipalities in Q3 2023, reaching 600 in
total.
-
HepsiJet is also a key component of our value proposition for our
merchants. In Q3 2023, HepsiJet delivered around 67% of our total
parcels (compared to 67% in Q3 2022).
-
In Q3 2023, HepsiJet had an NPS of 86.2 according to our internal
survey results, reflecting its high quality service. Through
HepsiJet, our customers enjoy flexible delivery options and value
added services.
-
Our oversized package delivery service delivered 57% of oversized
parcels ordered through our platform in Q3 2023, up from 53% in Q3
2022.
c) Pursuing profitability by focusing on core
operations, growth in non-electronics and step change in opex
-
Continuing the trend from the second quarter, we delivered a
positive IAS 29-Unadjusted EBITDA of TRY 644.0 million in Q3 2023.
This was achieved mainly through a stronger Gross Contribution,
optimized advertising spending and prudent approach to operational
expenses. EBITDA was also positive at TRY 87.9 million in Q3 2023
compared to negative TRY 1,030.7 million in Q3 2022.
-
We continued to invest in our in-house merchant application,
Hepsiburada My Business Partner, which, among other capabilities,
facilitates self-campaign management, coupon creation and ad
management, as well as customer communication. This application’s
ease of use increases merchant appreciation, while increased
autonomy allows merchants greater control and flexibility in
showcasing their products and engaging with customers.
-
We expanded our affordability solutions offering to allow key
merchants to offer BNPL solutions for their products on our
platform.
d) Offering payment, lending and last-mile
delivery services to third parties
-
Our strategy to extend our services and solutions beyond our
platform by offering them to other retailers benefits both retail
partners and customers. We see great potential for Hepsipay and
HepsiJet to use their assets and increase their revenue
contribution to our Company.
-
HepsiJet today serves nearly 1,800 external customers including
household-name retailers, doubling last year’s figure. We believe
HepsiJet is best positioned to build on this momentum and grow its
share in the logistics market.
-
The share of external customer volume in HepsiJet’s operations
surged to 24.8% in the third quarter of 2023, up from 16.4% in Q3
2022. Total parcel volume of third parties delivered in Q3 2023
nearly doubled compared to Q3 2022.
-
Having launched in July 2023, Hepsipay’s one-click check-out (Pay
with Hepsipay) offering was successfully integrated into the online
check out of several large Turkish retailers in Q3 2023. Through
this offering, Hepsipay has gained a share of these retailers’
online sales by enabling payment with cards stored on Hepsipay
wallet. We believe that the envisaged growth in one-click check-out
integrations will become instrumental in Hepsipay’s off-platform
expansion.
-
Hepsipay's solid 13.2 million wallet base, diverse affordability
solutions, own loyalty program (Hepsipara Program) and fast and
reliable check-out attest to its competitive advantage.
ESG Actions
-
Efforts to integrate sustainability goals into Hepsiburada’s
business processes have continued in the third quarter of 2023. To
incorporate sustainability principles into every stage of the
business, Hepsiburada provided Corporate Sustainability training to
its employees.
-
As part of its social responsibility projects, Hepsiburada
continues to provide food, medical supplies and logistics support
to animal associations.
-
Since its inception in April, Hepsiburada’s “A Smile is Enough”
project has reached 35 thousand children.
-
Hepsiburada recycles used electronic devices through its “Renew the
Old” project, employs responsible packaging practices to minimize
waste and reduces its environmental footprint through efficient and
innovative efforts.
-
Hepsiburada has continued prioritizing Circularity and Waste
Management to reduce its operational waste-related environmental
impact.
-
Our “Technology Empowerment for Women Entrepreneurs” (“TEWE”)
program, launched in 2017 to develop women’s role in the Turkish
digital economy, reached an additional 2,142 women in Q3 2023. To
date, the program has supported around 47.5 thousand women
entrepreneurs. Furthermore, the number of women’s cooperatives on
our platform has reached 233 as of September 30, 2023.
-
Since the earthquakes that struck the southeastern region of
Türkiye in February 2023, various NGO collaborations, as part of
the TEWE program, have been established to provide sustainable
support to the impacted region. As of September 30, 2023, the
number of women entrepreneurs and women’s cooperatives in the
earthquake zone has reached 3,073 and 34, respectively.
Subsequent Events
Hepsiburada Global B.V.’s initial share capital subscription was
paid in on October 26, 2023.
In line with Hepsiburada’s strategy to expand
its operations, Hepsiburada previously announced the establishment
of a wholly-owned subsidiary in the Netherlands, under the
tradename Hepsiburada Global B.V., with an aggregate issued share
capital of EUR 1,000,000. The initial EUR 100,000 share capital
subscription of Hepsiburada Global B.V. was paid in on October 26,
2023. Hepsiburada Global B.V. is expected to facilitate
Hepsiburada’s integration with European payment solutions and
marketplaces.
Key Highlight of Our Performance During Legendary November
Our business is characterized by seasonality,
with higher sales typically generated during the fourth quarter of
the year. One key driver is the month of November during which we
traditionally hold numerous campaigns with participating merchants.
Our preliminary “Legendary November” results indicate that we
delivered yet another strong performance in November this year.
Below are key highlights:
-
Our IAS 29-Unadjusted GMV doubled compared to the same period of
2022. The number of orders (excluding digital products) was 2.0
times that of the monthly average of the prior months of 2023. Our
platform attracted almost 500 million visits and sold over 30
million pieces.
-
The most significant surges in orders by category were among
clothing, home appliances, home and garden and
fast-moving-consumer-goods, each compared to the same period of
last year.
-
On Singles Day (November 11), we reached the sales record of the
month with 1.6 million pieces (excluding digital products) sold and
GMV in absolute terms in a single day.
-
Our affordability solutions and our loyalty program were particular
attraction points. There were 317 thousand applications for BNPL
limit.
-
Around 46% of the GMV generated through sales with credit cards
came through installment sales.
-
The total number of Hepsiburada Premium members (who benefit from
free delivery on any orders along with other benefits) continued to
rise, reaching 2 million by the end of the month.
Hepsiburada Financial
Review
Restatement of financial
information: Pursuant to IAS 29, the financial statements
of an entity whose functional currency is that of a
hyperinflationary economy is reported in terms of the measuring
unit current as of the reporting date of the financial statements.
All amounts included in the balance sheet which are not stated in
terms of the measuring unit current as of the date of the financial
statements are restated applying the general price index. In
summary:
(i) Non-monetary items are restated
from the date of acquisition to the end of the reporting
period.(ii) Monetary items that are
already expressed in terms of the monetary unit current at the end
of the reporting period are not
restated.(iii) Comparative periods are
stated in terms of measuring unit current at the end of the
reporting period.(iv) All items in the
statement of comprehensive loss are stated in terms of the
measuring unit current as of the date of the financial statements,
applying the relevant (monthly) conversion
factors.(v) The gain or loss on the
net monetary position is included in the statement of comprehensive
loss and separately disclosed.
Note: All financial figures in
the tables provided are expressed in terms of the purchasing power
of the Turkish Lira at September 30, 2023 (in accordance with IAS
29) unless otherwise indicated.
(in TRY million unless otherwise
indicated) |
Three months ended September 30, |
Nine months ended September 30, |
unaudited |
|
unaudited |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
GMV (TRY in billion) |
25.7 |
17.7 |
45.1% |
69.5 |
51.8 |
34.2% |
Marketplace
GMV (TRY in billion) |
16.8 |
12.1 |
39.3% |
46.5 |
34.1 |
36.2% |
Share of
Marketplace GMV (%) |
65.5% |
68.2% |
(2.7pp) |
66.9% |
65.9% |
1.0pp |
Revenue |
8,057.4 |
5,300.1 |
52.0% |
21,596.7 |
15,786.0 |
36.8% |
Gross
contribution |
2,415.0 |
1,478.6 |
63.3% |
6,505.3 |
2,953.2 |
120.3% |
Gross
contribution margin (%) |
9.4% |
8.4% |
1.0pp |
9.4% |
5.7% |
3.7pp |
Net
income/(loss) for the period |
(191.1) |
(923.1) |
(79.3%) |
654.5 |
(3,527.2) |
n.m. |
EBITDA |
87.9 |
(1,030.7) |
n.m. |
291.0 |
(3,503.9) |
n.m. |
EBITDA as a
percentage of GMV (%) |
0.3% |
(5.8%) |
6.2pp |
0.4% |
(6.8%) |
7.2pp |
Net cash
provided by/(used in) operating activities |
2,240.6 |
874.8 |
156.1% |
1,780.7 |
(1,295.1) |
n.m |
Free Cash Flow |
2,006.6 |
534.7 |
275.3% |
1,041.9 |
(2,211.1) |
n.m |
Note: Unless otherwise
indicated, all discussions and analysis provided in this section
are based on inflation-adjusted IFRS figures and non-IFRS
measures.
Revenue
(in TRY million, unaudited) |
Three months ended September 30, |
Nine months ended September 30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
Sale of goods1 (1P) |
5,916.1 |
3,947.0 |
49.9% |
15,893.5 |
12,388.8 |
28.3% |
Marketplace revenue2 (3P) |
1,053.2 |
656.0 |
60.5% |
2,914.1 |
1,693.7 |
72.1% |
Delivery service revenue |
813.5 |
570.0 |
42.7% |
2,139.2 |
1,446.1 |
47.9% |
Other |
274.6 |
127.1 |
116.1% |
649.9 |
257.4 |
152.5% |
Revenue |
8,057.4 |
5,300.1 |
52.0% |
21,596.7 |
15,786.0 |
36.8% |
1: In 1P direct sales model, we act as a principal
and initially recognize revenue from the sales of goods on a gross
basis at the time of delivery of the goods to our customers. 2: In
the 3P marketplace model, revenues are recorded on a net basis,
mainly consisting of marketplace commission, transaction fees and
other contractual charges to the merchants. |
Our revenue increased by 52.0% to TRY 8,057.4
million in Q3 2023 compared to TRY 5,300.1 million in Q3 2022. This
was mainly due to a 49.9% increase in sale of goods (1P) revenue
(comprising 73.4% of total revenue) and a 60.5% increase in
Marketplace revenue (3P) (comprising 13.1% of total revenue),
compared to Q3 2022. Our delivery service revenue, comprising 10.1%
of total revenue, rose 42.7% compared to Q3 2022. Meanwhile, other
revenue which mainly consist of HepsiAd (our advertising platform)
which saw strong growth of 52.7%, HepsiLojistik (our fulfillment
services provider), and Hepsiburada Premium subscription revenue
streams, in total, grew by 116.1% compared to Q3 2022.
While GMV increased by 45.1% in Q3 2023 compared
to Q3 2022, total 1P and 3P revenue growth during this period was
51.4%. Faster revenue growth compared to GMV growth was mainly due
to a 2.7 percentage point (pp) shift in GMV mix towards 1P, a shift
in the 3P GMV mix towards higher margin categories, and
comparatively lower customer discounts in our quarterly 3P
operations compared to Q3 2022.
The 42.7% increase in delivery service revenue
compared to Q3 2022 was mainly due to i) an annual and mid-year
rise in unit delivery service charges, ii) an increase in delivery
service revenue from off-platform customers of Hepsijet and iii) an
increase in the number of parcels delivered.
Gross Contribution
(in TRY million unless indicated otherwise,
unaudited) |
Three months ended September 30, |
Nine months ended September
30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
Revenue |
8,057.4 |
5,300.1 |
52.0% |
21,596.7 |
15,786.0 |
36.8% |
Cost of inventory sold |
(5,642.4) |
(3,821.5) |
47.7% |
(15,091.4) |
(12,832.8) |
17.6% |
Gross Contribution |
2,415.0 |
1,478.6 |
63.3% |
6,505.3 |
2,953.2 |
120.3% |
Gross contribution margin (% of GMV) |
9.4% |
8.4% |
1.0pp |
9.4% |
5.7% |
3.7pp |
The gross contribution margin improved by 1.0pp
to 9.4% in Q3 2023 compared to 8.4% in Q3 2022. This margin
improvement was mainly attributable to (i) a 0.4pp rise in 1P
margin primarily due to a higher discount impact on cost of
inventory sold due to purchases on credit, (ii) a 0.4pp improvement
in 3P margin due to the change in the 3P GMV category mix towards
higher margin categories and (iii) a 0.4pp improvement derived from
higher other revenue. In addition, the faster inventory turnover in
Q3 2023 (54 days in Q3 2023 compared to 87 days in Q3 2022)
partially compensated for the margin deteriorating impact of
significantly higher quarterly average inflation in Q3 2023 over
the previous year’s level.
The table below shows the monthly inflation
rates in 2023 and 2022.
Consumer inflation Monthly
(2003=100) |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
2023 |
7% |
3% |
2% |
2% |
0% |
4% |
9% |
9% |
5% |
- |
- |
- |
2022 |
11% |
5% |
5% |
7% |
3% |
5% |
2% |
1% |
3% |
4% |
3% |
1% |
Source: Data as announced by TurkStat |
Operating Expenses
The table below shows our operating expenses for
the three months and nine months ended September 30, 2023 and 2022
in absolute terms and as a percentage of GMV:
(in TRY million unless indicated otherwise,
unaudited) |
Three months ended September 30, |
Nine months ended September
30, |
2023 |
2022 |
y/y% |
2023 |
2022 |
y/y% |
Cost of inventory sold |
(5,642.4) |
(3,821.5) |
47.6% |
(15,091.4) |
(12,832.8) |
17.6% |
% of GMV |
(22.0%) |
(21.6%) |
(0.4pp) |
(21.7%) |
(24.8%) |
3.1pp |
Shipping and packaging expenses |
(768.0) |
(544.2) |
41.1% |
(1,999.9) |
(1,648.1) |
21.3% |
% of GMV |
(3.0%) |
(3.1%) |
0.1pp |
(2.9%) |
(3.2%) |
0.3pp |
Payroll and outsource staff expenses |
(811.4) |
(671.6) |
20.8% |
(2,220.8) |
(1,824.2) |
21.7% |
% of GMV |
(3.2%) |
(3.8%) |
0.6pp |
(3.2%) |
(3.5%) |
0.3pp |
Advertising expenses |
(578.4) |
(591.3) |
(2.2%) |
(1,428.1) |
(1,876.3) |
(23.9%) |
% of GMV |
(2.3%) |
(3.3%) |
1.1pp |
(2.1%) |
(3.6%) |
1.6pp |
Technology expenses |
(91.7) |
(72.2) |
27.0% |
(256.5) |
(201.4) |
27.4% |
% of GMV |
(0.4%) |
(0.4%) |
0.0pp |
(0.4%) |
(0.4%) |
0.0pp |
Depreciation and amortization |
(252.0) |
(160.0) |
57.5% |
(745.3) |
(500.8) |
48.8% |
% of GMV |
(1.0%) |
(0.9%) |
(0.1pp) |
(1.1%) |
(1.0%) |
(0.1pp) |
Other operating expenses, net |
(77.5) |
(630.1) |
(87.7%) |
(308.9) |
(907.2) |
(66.0%) |
% of GMV |
(0.3%) |
(3.6%) |
3.3pp |
(0.4%) |
(1.8%) |
1.3pp |
Net operating expenses |
(8,221.4) |
(6,490.9) |
26.7% |
(22,050.9) |
(19,790.8) |
11.42% |
Net operating expenses as a % of GMV |
(32.0%) |
(36.7%) |
4.7pp |
(31.7%) |
(38.2%) |
6.5pp |
Net operating expenses increased by 26.7% to TRY
8,221.4 million in Q3 2023 compared to TRY 6,490.9 million in Q3
2022. As a percentage of GMV, our net operating expenses declined
4.7pp mainly due to a 3.3pp decrease in other operating expenses,
net, a 1.1pp decrease in advertising expenses, a 0.6pp decrease in
payroll and outsource staff expenses as a percentage of GMV and a
0.1pp decrease in shipping and packaging expenses. This was
partially offset by a 0.4pp rise in cost of inventory sold and
0.1pp rise in depreciation and amortization as a percentage of
GMV.
The 3.3pp decline in other operating expenses,
net, as a percentage of GMV, was mainly due to settlement of the
USD 3,975 thousand (equivalent to TRY 108.8 million) contribution
amount owed by TurkCommerce B.V. to Hepsiburada under the term
sheet entered into between the parties (as disclosed in greater
detail in our Form 6-K furnished to the U.S. Securities and
Exchange Commission on September 28, 2023) and the provision
expense of USD 13.9 million (TRY 416.5 million) that impacted Q3
2022, as disclosed in greater detail in our Form 6-K furnished to
the U.S. Securities and Exchange Commission on December 6,
2022.
The 1.1pp decline in advertising expenses as a
percentage of GMV resulted from our continued efficiency in
marketing spend. In this regard, we have continued to invest in
data-driven marketing tools that contribute to sales conversion.
Further, our loyalty program has helped us foster stronger
relationships with our customers and led to repeat purchases. In
addition, our co-marketing deals with several leading brands have
proven to be mutually beneficial.
The 0.4pp increase in cost of inventory sold was
mainly due to a 2.7pp shift in GMV mix towards 1P compared Q3
2022.
Financial Income
(in TRY million, unaudited) |
Three months ended September 30, |
Nine months ended September 30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
Foreign currency exchange gains |
260.2 |
586.7 |
(55.7%) |
1,765.5 |
2,213.8 |
(20.3%) |
Interest income on time deposits |
73.5 |
64.7 |
13.6% |
241.0 |
166.7 |
44.6% |
Interest income on credit sales |
88.0 |
46.8 |
88.0% |
203.3 |
117.2 |
73.5% |
Fair value gains on financial assets measured at fair value |
18.4 |
11.0 |
67.3% |
198.6 |
40.5 |
390.4% |
Other |
63.5 |
18.8 |
237.8% |
116.0 |
20.4 |
468.6% |
Financial income |
503.6 |
728.0 |
(30.8%) |
2,524.4 |
2,558.6 |
(1.3%) |
Our financial income decreased by 30.8%, or TRY
224.4 million, to TRY 503.6 million in Q3 2023 compared to TRY
728.0 million in Q3 2022. This was mainly driven by a TRY 326.5
million decrease in foreign currency exchange gains from our U.S.
dollar denominated bank deposits due to the U.S. dollar/TRY
depreciation during Q3 2023 compared to Q3 2022. The decrease in
financial income was partially off-set by an increase in interest
income as a result of higher annual interest rates.
Financial Expenses
(in TRY million, unaudited) |
Three months ended September
30, |
Nine months ended September
30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y% |
Commission expenses due to early collection of credit card
receivables |
(408.4) |
(271.4) |
50.5% |
(980.8) |
(790.2) |
24.1% |
Foreign currency exchange losses |
(91.8) |
(155.1) |
(40.8%) |
(591.8) |
(644.8) |
(8.2%) |
Interest expenses on bank borrowings and lease liabilities |
(37.9) |
(24.8) |
52.8% |
(123.5) |
(122.3) |
1.0% |
Interest expenses on purchases |
(359.6) |
(40.9) |
779.2% |
(507.0) |
(185.5) |
173.3% |
Fair value losses on financial assets measured at fair value |
0.0 |
0.0 |
n.m. |
0.0 |
(115.4) |
n.m. |
Other |
(3.5) |
(0.7) |
400.0% |
(7.9) |
(1.6) |
393.8% |
Financial expenses |
(901.2) |
(492.9) |
82.8% |
(2,211.0) |
(1,859.8) |
18.9% |
Our financial expenses increased by 82.8%, or
TRY 408.3 million, to TRY 901.2 million in Q3 2023 compared to TRY
492.9 million in Q3 2022, primarily attributable to a TRY 318.7
million increase in interest expenses on purchases and a TRY 137.0
million increase in commission expenses due to early collection of
credit card receivables as a result of (i) an increase in annual
effective interest rates, (ii) an increase in GMV and (iii) an
increase in purchased goods during Q3 2023, each compared to Q3
2022.
Net Loss for the Period
Net loss for the period was TRY 191.1 million in
Q3 2023 down from a net loss of TRY 923.1 million in Q3 2022. This
TRY 732.0 million improvement resulted from the TRY 1,118.6 million
improvement in EBITDA and TRY 338.2 million increase in monetary
gain in Q3 2023 against TRY 632.9 million decrease in net financial
income (net of financial expense) and TRY 92.0 million increase in
depreciation and amortization.
EBITDA
EBITDA was TRY 87.9 million in Q3 2023 compared
to negative TRY 1,030.7 million in Q3 2022, corresponding to 0.3%
EBITDA as a percentage of GMV in Q3 2023. This corresponded to a
6.2pp improvement in EBITDA as a percentage of GMV in Q3 2023
compared to Q3 2022. This strong improvement was driven by a 1.0pp
rise in gross contribution margin, a 1.1pp decline in advertising
expenses, a 0.1pp decline in shipping and packaging expenses, a
0.6pp decline in payroll and outsource staff expenses and a 3.3pp
decline in other operating expenses, net as a percentage of
GMV.
Cash Flow from Operating Activities
Our net cash provided by operating activities in
Q3 2023 comprised a TRY 191.1 million net loss (Q3 2022: net loss
of TRY 923.1 million), a negative TRY 181.7 million change in net
working capital (Q3 2022: positive TRY 1,016.7 million) and a TRY
2,613.3 million change in other items (comprising non-cash items
such as provisions and depreciation expenses as well as
non-operating items such as financial income & expenses and
non-operating monetary gains & losses) (Q3 2022: TRY 781.2
million). The negative change in net working capital is mainly due
to an increase in trade receivables (BNPL receivables and credit
card receivables) and an increase in inventory levels as of
September 30 2023.
Net cash provided by operating activities
increased by TRY 1,365.8 million to TRY 2,240.6 million in Q3 2023
compared to net cash provided by operating activities in Q3 2022 of
TRY 874.8 million.
Free Cash Flow
Our free cash flow increased to TRY 2,006.6
million in Q3 2023 from TRY 534.7 million in Q3 2022. This increase
was mainly driven by the rise in cash flow provided by operating
activities, which is as a result of a significant improvement in
EBITDA as well as efficiencies realized in our technology
organization.
Total Cash and Financial
Investments
Total cash and cash equivalents was at TRY
5,714.1 million as of September 30, 2023 compared to TRY 7,891.4
million as of December 31, 2022. Despite better performance in free
cash flow, TRY 2,177.3 million decrease was mainly due to slower
appreciation of USD/TRY rate and lower time deposit interest rates
against the nine-month inflation as well as higher cash used in
financing activities.
Total financial investments as of September 30,
2023 amounts to TRY 686.2 million. Our financial investments
consist of a financial asset measured at fair value through profit
or loss.
We held around 80% of our total cash, cash
equivalents and financial investments in U.S. dollars as of
September 30, 2023.
Bank Borrowings
Our short-term bank borrowings are utilized to
facilitate supplier and merchant financing as well as for our
short-term liquidity needs in the ordinary course of our
operations. Our short-term borrowings increased to TRY 195.4
million as of September 30, 2023, from TRY 19.6 million as of
December 31, 2022. As of September 30, 2023, supplier and merchant
financing loans corresponded to TRY 11.4 million of the short-term
bank borrowings compared to TRY 1.2 million as of December 31,
2022. Our long-term borrowings decreased from TRY 16.4 million as
of December 31, 2022 to TRY 4.4 million as of September 30,
2023.
All of our bank borrowings are denominated in
Turkish Lira. As of September 30, 2023, the average annual
effective interest rate for bank borrowings (excluding those
non-interest bearing loans) remained at around the same level of
21.3% compared to as of December 31, 2022.
Conference Call Details
The Company’s management will host an analyst
and investor conference call and live webcast to discuss its
unaudited financial results today, Tuesday, December 5, 2023 at
4.00 p.m. Istanbul time / 1.00 p.m. London / 8.00 a.m. New York
time.
The live webcast can be accessed via
https://87399.themediaframe.eu/links/hepsiburada231205.html.
Telephone Participation Dial in
Details:
|
• Türkiye:
|
+ 90 212 900
371 |
|
• UK &
International: |
+ 44 (0) 203 059 5872 |
|
• USA:
|
+ 1 516 447 5632 |
Participants may choose any of the above numbers
to participate should they wish to ask questions.
The Company’s results
presentation will be available at the Hepsiburada Investor
Relations website https://investors.hepsiburada.com on December 5,
2023.
Replay Following the call, a
replay will be available on the Hepsiburada Investor Relations
website https://investors.hepsiburada.comD-MARKET
Electronic Services & Trading
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of Turkish lira (TRY) in terms of
the purchasing power of the TRY at 30 September 2023 unless
otherwise indicated.) |
|
30 September 2023(unaudited) |
31 December 2022(audited) |
|
|
|
ASSETS |
|
|
Current assets: |
|
|
Cash and
cash equivalents |
5,714,064 |
7,891,382 |
Restricted cash |
135,819 |
160,985 |
Financial
investments |
686,196 |
26,310 |
Trade
receivables |
1,537,166 |
995,369 |
Due from
related parties |
4,388 |
2,574 |
Loan
receivables |
168 |
5,266 |
Inventories |
3,823,669 |
2,679,780 |
Contract
assets |
29,928 |
23,000 |
Other
current assets |
961,202 |
770,420 |
|
|
|
Total current assets |
12,892,600 |
12,555,086 |
|
|
|
Non-current assets: |
|
|
Property
and equipment |
452,126 |
506,496 |
Intangible assets |
1,572,894 |
1,267,495 |
Right of
use assets |
508,786 |
657,178 |
Loan
receivables |
1,597 |
5,781 |
Other
non-current assets |
42,557 |
94,432 |
|
|
|
Total non-current assets |
2,577,960 |
2,531,382 |
|
|
|
Total assets |
15,470,560 |
15,086,468 |
LIABILITIES AND EQUITY |
|
|
Current liabilities: |
|
|
Bank
borrowings |
195,394 |
19,554 |
Lease
liabilities |
148,951 |
235,892 |
Wallet
deposits |
160,051 |
170,076 |
Trade
payables and payables to merchants |
8,881,831 |
8,821,278 |
Due to
related parties |
6,539 |
8,360 |
Provisions |
71,161 |
591,965 |
Employee
benefit obligations |
195,922 |
233,877 |
Contract
liabilities and merchant advances |
967,237 |
956,908 |
Other
current liabilities |
562,795 |
569,494 |
|
|
|
Total current liabilities |
11,189,881 |
11,607,404 |
|
|
|
Non-current assets: |
|
|
Bank borrowings |
4,387 |
16,370 |
Lease
liabilities |
90,272 |
157,278 |
Employee
benefit obligations |
83,463 |
24,662 |
Other non-current liabilities |
390,861 |
219,681 |
|
|
|
Total non-current liabilities |
568,983 |
417,991 |
Equity: |
|
|
Share
capital |
453,514 |
453,514 |
Other
capital reserves |
539,560 |
483,232 |
Share
premiums |
13,172,108 |
13,172,108 |
Accumulated deficit |
(10,453,486) |
(11,047,781) |
|
|
|
Total equity |
3,711,696 |
3,061,073 |
|
Total equity and liabilities |
15,470,560 |
15,086,468 |
D-MARKET Electronic Services &
Trading
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
(Amounts expressed in thousands of Turkish lira (TRY) in terms of
the purchasing power of the TRY at 30 September 2023 unless
otherwise indicated. Unaudited.) |
|
Nine Months Ended |
Three Months Ended |
|
30 September 2023 |
30 September 2022 |
30 September2023 |
30 September 2022 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Revenues |
21,596,689 |
15,786,063 |
8,057,413 |
5,300,079 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Cost of
inventory sold |
(15,091,432) |
(12,832,781) |
(5,642,430) |
(3,821,481) |
Shipping
and packaging expenses |
(1,999,904) |
(1,648,147) |
(768,017) |
(544,178) |
Payroll
and outsource staff expenses |
(2,220,823) |
(1,824,164) |
(811,435) |
(671,559) |
Advertising expenses |
(1,428,064) |
(1,876,335) |
(578,440) |
(591,261) |
Technology expenses |
(256,529) |
(201,372) |
(91,655) |
(72,239) |
Depreciation and amortization |
(745,314) |
(500,775) |
(251,990) |
(160,040) |
Other
operating expenses |
(678,281) |
(989,748) |
(233,879) |
(654,346) |
Other
operating income |
369,392 |
82,545 |
156,385 |
24,290 |
|
|
|
|
|
Operating loss |
(454,266) |
(4,004,714) |
(164,048) |
(1,190,735) |
|
|
|
|
|
Financial
income |
2,524,410 |
2,558,675 |
503,587 |
728,096 |
Financial
expenses |
(2,211,054) |
(1,859,864) |
(901,281) |
(492,909) |
Monetary
gains/ (losses) |
795,380 |
(221,255) |
370,648 |
32,479 |
|
|
|
|
|
Income/(loss) before income taxes |
654,470 |
(3,527,158) |
(191,094) |
(923,069) |
|
|
|
|
|
Taxation
on income |
- |
- |
- |
- |
|
|
|
|
|
Income/(loss) for the period |
654,470 |
(3,527,158) |
(191,094) |
(923,069) |
|
|
|
|
|
Basic and diluted loss per share |
2.01 |
(10.82) |
(0.59) |
(2.83) |
|
|
|
|
|
Other comprehensive loss:Items that will
not be reclassified to |
|
|
|
|
profit or loss in subsequent
period: |
|
|
|
|
Actuarial losses arising on remeasurement of |
|
|
|
|
post-employment benefits |
(60,175) |
(22,761) |
1,288 |
(14,407) |
|
|
|
|
|
Items that will be reclassified to |
|
|
|
|
profit or loss in subsequent
period: |
|
|
|
|
Changes in the fair value of debt instruments at fair value through
other comprehensive income |
- |
(4,278) |
- |
65,474 |
|
|
|
|
|
Total comprehensive income/(loss) for the
period |
594,295 |
(3,554,197) |
(189,806) |
(872,002) |
D-MARKET Electronic Services &
Trading
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Amounts expressed in thousands of Turkish lira (TRY) in terms of
the purchasing power of the TRY at 30 September 2023 unless
otherwise indicated. Unaudited.) |
|
1 January – |
1 January – |
30
September 2023 |
30
September 2022 |
|
(unaudited) |
(unaudited) |
Income/(loss) before income taxes |
654,470 |
(3,527,158) |
Adjustments to reconcile income/(loss) before income taxes
to cash flows from operating activities: |
3,406,803 |
3,560,544 |
Interest
and commission expenses |
1,611,358 |
1,097,998 |
Depreciation and amortization |
745,314 |
500,775 |
Interest
income on time deposits and financial instruments |
(241,045) |
(166,729) |
Interest
income on credit sales |
(203,270) |
(117,233) |
Provision
for unused vacation liability |
63,293 |
22,906 |
Provision
for personnel bonus |
139,275 |
127,682 |
Provision
for legal cases |
8,816 |
6,734 |
Provision
for doubtful receivables |
28,970 |
22,834 |
Provision
for impairment of trade goods, net |
91,961 |
(3,333) |
Provision
for post-employment benefits |
39,699 |
4,073 |
Provision
for share based payment |
56,328 |
173,069 |
Adjustment for impairment loss of financial investments |
(198,588) |
74,945 |
Provision
for the Competition Board penalty |
(115,128) |
- |
Provision
for Settlement of Legal Proceedings |
14,332 |
416,544 |
Provision
for Turkish Capital Markets Board fee |
29,332 |
- |
Contribution income for settlement |
(108,822) |
- |
Non-cash
charges |
- |
(1,765) |
Net
foreign exchange differences |
(996,695) |
(1,869,162) |
Change in
provisions due to inflation |
(220,031) |
(181,803) |
Monetary
effect on non-operating activities |
2,661,704 |
3,453,009 |
Changes in net working capital |
|
|
Change in
trade payables and payables to merchants |
60,552 |
(2,350,071) |
Change in
inventories |
(1,235,850) |
805,019 |
Change in
trade receivables |
(552,277) |
125,949 |
Change in
contract liabilities and merchant advances |
10,329 |
161,542 |
Change in
contract assets |
(6,927) |
(488) |
Change in
other liabilities |
(18,881) |
(124,375) |
Change in
other assets and receivables |
4,370 |
195,558 |
Change in
due from related parties |
(1,814) |
3,862 |
Change in
due to related parties |
(1,821) |
(21,792) |
Post-employment benefits paid |
(17,176) |
(6,820) |
Payments
for concluded litigation |
(356,424) |
(1,931) |
Payments
for personnel bonus |
(159,791) |
(112,101) |
Payments
for unused vacation liabilities |
(4,671) |
(2,885) |
Collections of doubtful receivables |
(150) |
- |
Net cash used in operating activities |
1,780,742 |
(1,295,147) |
Investing activities: |
|
|
Purchases
of property and equipment and intangible assets |
(750,986) |
(916,510) |
Proceeds
from sale of property and equipment |
12,222 |
479 |
Purchase
of financial instruments |
(1,194,185) |
(2,356,278) |
Proceeds
from sale of financial investment |
615,738 |
3,474,797 |
Interest
received on credit sales |
203,270 |
117,233 |
Interest income on time deposits and financial instruments |
227,710 |
160,255 |
Payment
for acquired businesses, net of cash acquired |
- |
(6,893) |
Net cash used in investing activities |
(886,231) |
473,083 |
Financing activities: |
|
|
Proceeds
from borrowings |
418,470 |
1,443,851 |
Repayment
of borrowings |
(206,328) |
(1,717,522) |
Interest
and commission paid |
(1,555,161) |
(1,009,342) |
Lease payments |
(190,518) |
(215,156) |
Net cash used in financing activities |
(1,533,537) |
(1,498,169) |
|
|
|
Net decrease in cash and cash equivalents |
(639,026) |
(2,320,233) |
|
|
|
Cash and cash equivalents at 1 January |
7,882,080 |
9,385,351 |
Inflation effect on cash and
cash equivalents |
(2,538,790) |
(2,630,394) |
Effects
of exchange rate changes on cash and cash equivalents and
restricted cash |
987,164 |
1,168,463 |
Cash and cash equivalents at 30 September |
5,691,428 |
5,603,187 |
Presentation of Financial and Other
Information
Use of Non-IFRS Financial
Measures
Certain parts of this press release contain
non-IFRS financial measures which are unaudited supplementary
measures and are not required by, or presented in accordance with,
IFRS or any other generally accepted accounting principles. Such
measures are IAS 29-Unadjusted Revenue, IAS 29-Unadjusted Gross
Contribution, IAS 29-Unadjusted EBITDA, EBITDA, Gross Contribution,
Free Cash Flow and Net Working Capital. We define:
- IAS 29-Unadjusted
Revenue as revenue presented on an unadjusted for
inflation basis;
- IAS 29-Unadjusted Gross
Contribution as Gross Contribution presented on an
unadjusted for inflation basis;
- IAS 29-Unadjusted
EBITDA as EBITDA presented on an unadjusted for inflation
basis;
- EBITDA as profit
or loss for the period plus taxation on income less financial
income plus financial expenses, plus depreciation and amortization,
plus monetary gains/(losses);
- Gross Contribution
as revenues less cost of inventory sold;
- Free Cash Flow as
net cash provided by operating activities less capital expenditures
plus proceeds from sale of property and equipment; and
- Net
Working Capital as current assets (excluding cash, cash
equivalents and financial investments) minus current liabilities
(excluding current bank borrowings and current lease
liabilities).
You should not consider them as: (a) an
alternative to operating profit or net profit as determined in
accordance with IFRS or other generally accepted accounting
principles, or as measures of operating performance; (b) an
alternative to cash flows from operating, investing or financing
activities, as determined in accordance with IFRS or other
generally accepted accounting principles, or as a measure of our
ability to meet liquidity needs; or (c) an alternative to any other
measures of performance under IFRS or other generally accepted
accounting principles.
These measures are used by our management to
monitor the underlying performance of the business and our
operations. However, not all companies calculate these measures in
an identical manner and, therefore, our presentation may not be
comparable with similar measures used by other companies. As a
result, prospective investors should not place undue reliance on
this data.
This section includes a reconciliation of
certain of these non-IFRS measures to the closest IFRS measure.
EBITDA is a supplemental non-IFRS financial
measure that is not required by, or presented in accordance with,
IFRS. We have included EBITDA in this press release because it is a
key measure used by our management and board of directors to
evaluate our operating performance, generate future operating plans
and make strategic decisions regarding the allocation of capital.
In particular, the exclusion of certain expenses and, from the date
of applicability of IAS 29, related monetary gains/(losses), in
calculating EBITDA facilitates operating performance comparability
across reporting periods by removing the effect of non-cash
expenses (including monetary gains/(losses)) and non-operating
expense/(income). One of the objectives of IAS 29 is to account for
the financial gain or loss that arises from holding monetary assets
or liabilities during a reporting period (i.e. the monetary
gains/(losses)). Therefore, the monetary gains/(losses) are
excluded from EBITDA for a proper comparison of the operational
performance of the Company. Accordingly, we believe that EBITDA
provides useful information to investors in understanding and
evaluating our operating results in the same manner as our
management and board of directors.
Management uses EBITDA:
- as a measurement
of operating performance because it assists us in comparing our
operating performance on a consistent basis, as it removes the
impact of non-cash and non-operating items;
- for planning
purposes, including the preparation of our internal annual
operating budget and financial projections; and
- to evaluate the
performance and effectiveness of our strategic initiatives.
EBITDA has limitations as a financial measure,
including that other companies may calculate EBITDA differently,
which reduces its usefulness as a comparative measure and you
should not consider it in isolation or as a substitute for
profit/(loss) for the period, as a profit measure or other analysis
of our results as reported under IFRS.
The following table shows the reconciliation of
EBITDA to net income/(loss) for the periods presented.
Amounts expressed in millions of Turkish lira
(TRY) in terms of the purchasing power of the TRY at 30 September
2023. Unaudited.
Amounts expressed
in millions of Turkish lira (TRY) in terms of the purchasing power
of the TRY at 30 September 2023. Unaudited. |
(in TRY
million) |
Three months ended September
30, |
Nine months ended September
30, |
|
2023 |
2022 |
2023 |
2022 |
Net income/(loss) for the period |
(191.1) |
(923.1) |
654.5 |
(3,527.2) |
Taxation on income |
- |
- |
- |
- |
Financial income |
503.6 |
728.1 |
2,524.4 |
2,558.7 |
Financial expenses |
(901.3) |
(492.9) |
(2,211.1) |
(1,859.9) |
Depreciation and amortization |
(252.0) |
(160.0) |
(745.3) |
(500.8) |
Monetary gains/(losses) |
370.6 |
32.5 |
795.4 |
(221.3) |
EBITDA |
87.9 |
(1,030.7) |
291.1 |
(3,503.9) |
Gross contribution is a supplemental non-IFRS
financial measure that is not required by, or presented in
accordance with, IFRS. We have included gross contribution in this
press release because it is a key measure used by our management
and board of directors to evaluate our operational profitability as
it reflects direct costs of products sold to our buyers.
Accordingly, we believe that gross contribution provides useful
information to investors in understanding and evaluating our
operating results in the same manner as our management and board of
directors.
Gross contribution has limitations as a
financial measure, including that other companies may calculate
gross contribution differently, which reduces its usefulness as a
comparative measure and you should not consider it in isolation or
as a substitute for profit/(loss) for the period, as a profit
measure or other analysis of our results as reported under
IFRS.
The following table shows the reconciliation of
gross contribution to revenue for the periods presented.
Amounts expressed
in millions of Turkish lira (TRY) in terms of the purchasing power
of the TRY at 30 September 2023. Unaudited. |
|
Three months ended September
30, |
Nine months ended September
30, |
|
2023 |
2022 |
2023 |
2022 |
Revenue |
8,057.4 |
5,300.1 |
21,596.7 |
15,786.0 |
Cost of
inventory sold |
(5,642.4) |
(3,821.5) |
(15,091.4) |
(12,832.8) |
Gross Contribution |
2,415.0 |
1,478.6 |
6,505.3 |
2,953.2 |
IAS 29-Unadjusted Revenue, IAS 29-Unadjusted
Gross Contribution and IAS 29-Unadjusted EBITDA are supplemental
non-IFRS financial measures that are not required by, or presented
in accordance with, IFRS. We have included IAS 29-Unadjusted
Revenue, IAS 29-Unadjusted Gross Contribution and IAS 29-Unadjusted
EBITDA in this press release because we believe their inclusion
facilitates the understanding of Revenue, Gross Contribution and
EBITDA restated in accordance with IAS 29 as well as our year on
year GMV growth and profitability guidance.
IAS 29-Unadjusted Revenue, IAS 29-Unadjusted
Gross Contribution and IAS 29-Unadjusted EBITDA have limitations as
financial measures, including that other companies may calculate
IAS 29-Unadjusted Revenue, IAS 29-Unadjusted Gross Contribution and
IAS 29-Unadjusted EBITDA differently, which reduces their
usefulness as a comparative measure and you should not consider
them in isolation or as substitutes for revenue or profit/(loss)
for the period, as revenue or profit measures or other analysis of
our results as reported under IFRS.
The following table shows the reconciliation of
IAS 29-Unadjusted Revenue to revenue for the periods presented.
Amounts expressed
in millions of Turkish lira (TRY) in terms of the purchasing power
of the TRY at 30 September 2023. Unaudited. |
|
Three months ended September
30, |
Nine months ended September
30, |
|
2023 |
2022 |
2023 |
2022 |
Revenue |
8,057.4 |
5,300.1 |
21,596.7 |
15,786.0 |
Reversal
of IAS 29 adjustment |
450.0 |
2,094.1 |
3,709.7 |
7,190.5 |
IAS 29-Unadjusted Revenue |
7,607.4 |
3,206.0 |
17,887.0 |
8,595.5 |
The following table shows the reconciliation of
IAS 29-Unadjusted Gross Contribution to revenue for the periods
presented.
Amounts expressed
in millions of Turkish lira (TRY); IFRS figures (adjusted for IAS
29) in terms of the purchasing power of the TRY at 30 September
2023. Unaudited. |
|
Three months ended September 30, |
Nine months ended September 30, |
|
2023 |
2022 |
2023 |
2022 |
Revenue |
8,057.4 |
5,300.1 |
21,596.7 |
15,786.0 |
Cost of
inventory sold |
(5,642.4) |
(3,821.5) |
(15,091.4) |
(12,832.8) |
Gross Contribution |
2,415.0 |
1,478.6 |
6,505.3 |
2,953.2 |
Reversal
of IAS 29 adjustment |
(401.6) |
423.6 |
209.7 |
444.6 |
IAS 29 -
Unadjusted Gross Contribution |
2,816.6 |
1,055.0 |
6,295.6 |
2,508.6 |
The following tables show the reconciliation of
IAS 29-Unadjusted EBITDA to net income/(loss) for the periods
presented.
Amounts expressed in millions of Turkish lira (TRY); IFRS figures
(adjusted for IAS 29) in terms of the purchasing power of the TRY
at 30 September 2023. Unaudited. |
|
Three months ended |
|
30 September 2023 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 September
2023 |
30
September 2022 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 September
2022 |
Net income/(loss) for the
period |
(191.1) |
(350.3) |
159.2 |
(923.1) |
(507.3) |
(415.8) |
Taxation on income |
- |
- |
- |
- |
- |
- |
Financial income |
503.6 |
23.9 |
479.7 |
728.1 |
307.3 |
420.8 |
Financial expenses |
(901.3) |
(59.6) |
(841.7) |
(492.9) |
(193.5) |
(299.4) |
Depreciation and
amortization |
(252.0) |
(129.2) |
(122.8) |
(160.0) |
(73.6) |
(86.4) |
Monetary gains |
370.6 |
370.6 |
- |
32.5 |
32.5 |
- |
IAS 29-Unadjusted EBITDA |
|
|
644.0 |
|
|
(450.8) |
Amounts expressed in millions of Turkish lira (TRY); IFRS figures
(adjusted for IAS 29) in terms of the purchasing power of the TRY
at 30 September 2023. Unaudited. |
|
Nine months ended |
|
30 September 2023 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 September
2023 |
30
September 2022 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 September
2022 |
Net income/(loss) for the
period |
654.5 |
(405.9) |
1,060.4 |
(3,527.2) |
(2,656.2) |
(871.0) |
Taxation on income |
- |
- |
- |
- |
- |
- |
Financial income |
2,524.4 |
461.8 |
2,062.6 |
2,558.7 |
1,224.4 |
1,334.3 |
Financial expenses |
(2,211.1) |
(354.3) |
(1,856.8) |
(1,859.9) |
(854.8) |
(1,005.1) |
Depreciation and
amortization |
(745.3) |
(406.1) |
(339.2) |
(500.8) |
(300.2) |
(200.6) |
Monetary gains/(losses) |
795.4 |
795.4 |
- |
(221.3) |
(221.3) |
- |
IAS 29-Unadjusted EBITDA |
|
|
1,193.8 |
|
|
(999.6) |
Free Cash Flow is a supplemental non-IFRS
financial measure that is not required by, or presented in
accordance with, IFRS. We have included Free Cash Flow in this
press release because it is an important indicator of our liquidity
as it measures the amount of cash we generate/(use) and provides
additional perspective on whether we have sufficient cash after
funding our operations and capital expenditures. Accordingly, we
believe that Free Cash Flow provides useful information to
investors in understanding and evaluating our operating results in
the same manner as our management and board of directors.
Free Cash Flow has limitations as a financial
measure, and you should not consider it in isolation or as
substitutes for net cash used in operating activities as a measure
of our liquidity or other analysis of our results as reported under
IFRS. There are limitations to using non-IFRS financial measures,
including that other companies may calculate Free Cash Flow
differently. Because of these limitations, you should consider Free
Cash Flow alongside other financial performance measures, including
net cash used in operating activities, capital expenditures and our
other IFRS results.
The following table shows the reconciliation of
Free Cash Flow to net cash provided by/used in operating activities
for the periods presented.
Amounts expressed in millions of Turkish lira (TRY)
in terms of the purchasing power of the TRY at 30 September 2023.
Unaudited. |
(in TRY
million) |
Three months ended September
30, |
Nine months ended September
30, |
|
2023 |
2022 |
2023 |
2022 |
Net cash provided by/(used in)
operating activities |
2,240.6 |
874.8 |
1,780.7 |
(1,295.1) |
Capital expenditures |
(244.8) |
(340.2) |
(751.0) |
(916.5) |
Proceeds from the sale of
property and equipment |
10.8 |
0.1 |
12.2 |
0.5 |
Free Cash Flow |
2,006.6 |
534.7 |
1,041.9 |
(2,211.1) |
Net Working Capital is a supplemental non-IFRS
financial measure that is not required by, or presented in
accordance with, IFRS. Starting from Q4 2021, we have revised the
definition of Net Working Capital to include the “financial
investments” balance on our balance sheet as at December 31,
2021. As we believe financial investments are cash-like item
by nature, we deducted from current assets along with cash and cash
equivalents.
We have included Net Working Capital in this
press release because it is used to measure the short-term
liquidity of a business, and can also be used to obtain a general
impression of the ability of company management to utilize assets
in an efficient manner. Net Working Capital is critical since it is
used to keep our business operating smoothly and meet all our
financial obligations in the short-term. Accordingly, we believe
that Net Working Capital provides useful information to investors
in understanding and evaluating how we manage our short-term
liabilities.
The following table shows the reconciliation of
Net Working Capital to current assets and current liabilities as of
the dates indicated:
Amounts
expressed in millions of Turkish lira (TRY) in terms of the
purchasing power of the TRY at 30 September 2023. |
|
As of September 30, 2023 |
As of December 31, 2022 |
Current assets |
12,892.6 |
12,555.1 |
Cash and cash equivalents |
(5,714.1) |
(7,891.4) |
Financial investments |
(686.2) |
(26.3) |
Current liabilities |
(11,189.9) |
(11,607.4) |
Bank borrowings, current |
195.4 |
19.6 |
Lease liabilities, current |
149.0 |
235.9 |
Net Working Capital |
(4,353.2) |
(6,714.5) |
BREAKDOWN OF THE COMPARATIVE FIGURES
RESTATED BY INFLATIONCONSOLIDATED BALANCE
SHEETS (Amounts expressed in thousands of Turkish lira
(TRY); adjusted figures in terms of the purchasing power of the TRY
at 30 September 2023.)
(Amounts expressed in thousands of Turkish lira (TRY); adjusted
figures in terms of the purchasing power of the TRY at 30 September
2023.) |
|
Restatement Method |
Unaudited Unadjusted30 Sept
2023 |
IAS 29Adjustment |
Unaudited Adjusted30 Sept
2023 |
Unaudited Unadjusted31 Dec
2022 |
IAS 29Adjustment |
Audited Adjusted31 Dec 2022 |
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
1 |
5,714,064 |
- |
5,714,064 |
5,266,008 |
2,625,374 |
7,891,382 |
Restricted cash |
1 |
135,819 |
- |
135,819 |
107,427 |
53,558 |
160,985 |
Financial
investments |
1 |
686,196 |
- |
686,196 |
17,557 |
8,753 |
26,310 |
Trade
receivables |
1 |
1,537,166 |
- |
1,537,166 |
664,221 |
331,148 |
995,369 |
Due from
related parties |
1 |
4,388 |
- |
4,388 |
1,718 |
856 |
2,574 |
Loan
receivables |
1 |
168 |
- |
168 |
3,514 |
1,752 |
5,266 |
Inventories |
2 |
3,664,611 |
159,058 |
3,823,669 |
1,724,330 |
955,450 |
2,679,780 |
Contract
assets |
1 |
29,928 |
- |
29,928 |
15,348 |
7,652 |
23,000 |
Other
current assets |
3 |
927,737 |
33,465 |
961,202 |
506,890 |
263,530 |
770,420 |
Total current assets |
|
12,700,077 |
192,523 |
12,892,600 |
8,307,013 |
4,248,073 |
12,555,086 |
Non-current assets: |
|
|
|
|
|
|
|
Property
and equipment |
2 |
225,624 |
226,502 |
452,126 |
221,626 |
284,870 |
506,496 |
Intangible assets |
2 |
1,006,422 |
566,472 |
1,572,894 |
655,891 |
611,604 |
1,267,495 |
Right of
use assets |
2 |
246,607 |
262,179 |
508,786 |
261,091 |
396,087 |
657,178 |
Loan
receivables |
1 |
1,597 |
- |
1,597 |
3,858 |
1,923 |
5,781 |
Other non-current assets |
3 |
36,224 |
6,333 |
42,557 |
62,700 |
31,732 |
94,432 |
Total non-current assets |
|
1,516,474 |
1,061,486 |
2,577,960 |
1,205,166 |
1,326,216 |
2,531,382 |
Total assets |
|
14,216,551 |
1,254,009 |
15,470,560 |
9,512,179 |
5,574,289 |
15,086,468 |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Bank
borrowings |
1 |
195,394 |
- |
195,394 |
13,049 |
6,505 |
19,554 |
Lease
liabilities |
1 |
148,951 |
- |
148,951 |
157,414 |
78,478 |
235,892 |
Wallet
deposits |
1 |
160,051 |
- |
160,051 |
113,493 |
56,583 |
170,076 |
Trade
payables and payables to merchants |
1 |
8,881,831 |
- |
8,881,831 |
5,886,538 |
2,934,740 |
8,821,278 |
Due to
related parties |
1 |
6,539 |
- |
6,539 |
5,579 |
2,781 |
8,360 |
Provisions |
1 |
71,161 |
- |
71,161 |
395,025 |
196,940 |
591,965 |
Employee
benefit obligations |
1 |
195,922 |
- |
195,922 |
156,069 |
77,808 |
233,877 |
Contract
liabilities and merchant advances |
1 |
967,237 |
- |
967,237 |
638,556 |
318,352 |
956,908 |
Other current liabilities |
3 |
530,001 |
32,794 |
562,795 |
367,091 |
202,403 |
569,494 |
Total current liabilities |
|
11,157,087 |
32,794 |
11,189,881 |
7,732,814 |
3,874,590 |
11,607,404 |
Non-current liabilities: |
|
|
|
|
|
|
|
Bank borrowings |
1 |
4,387 |
- |
4,387 |
10,924 |
5,446 |
16,370 |
Lease
liabilities |
1 |
90,272 |
- |
90,272 |
104,953 |
52,325 |
157,278 |
Employee
benefit obligations |
1 |
83,463 |
- |
83,463 |
16,457 |
8,205 |
24,662 |
Other non-current liabilities |
2 |
252,316 |
138,545 |
390,861 |
77,076 |
142,605 |
219,681 |
Total non-current liabilities |
|
430,438 |
138,545 |
568,983 |
209,410 |
208,581 |
417,991 |
Equity: |
|
|
|
|
|
|
|
Share
capital |
4 |
65,200 |
388,314 |
453,514 |
65,200 |
388,314 |
453,514 |
Other
capital reserves |
4 |
262,716 |
276,844 |
539,560 |
215,245 |
267,987 |
483,232 |
Share
premiums |
4 |
4,260,737 |
8,911,371 |
13,172,108 |
4,260,737 |
8,911,371 |
13,172,108 |
Accumulated deficit |
5 |
(1,959,627) |
(8,493,859) |
(10,453,486) |
(2,971,227) |
(8,076,554) |
(11,047,781) |
Total equity |
|
2,629,026 |
1,082,670 |
3,711,696 |
1,569,955 |
1,491,118 |
3,061,073 |
Total equity and liabilities |
|
14,216,551 |
1,254,009 |
15,470,560 |
9,512,179 |
5,574,289 |
15,086,468 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
(Amounts expressed in thousands of Turkish lira (TRY); adjusted
figures in terms of the purchasing power of the TRY at 30 September
2023. Unaudited.) |
|
|
Three Months Ended |
|
Restatement Method |
Unaudited Unadjusted30 Sept
2023 |
IAS 29Adjustment |
Unaudited Adjusted30 Sept
2023 |
Unaudited Unadjusted30 Sept
2022 |
IAS 29Adjustment |
Unaudited Adjusted30 Sept
2022 |
|
|
|
|
|
|
|
|
Sale of goods (1P) |
6 |
5,594,310 |
321,824 |
5,916,134 |
2,389,792 |
1,557,171 |
3,946,963 |
Marketplace revenue (3P) |
6 |
987,702 |
65,521 |
1,053,223 |
396,862 |
259,178 |
656,040 |
Delivery service revenue |
6 |
766,196 |
47,272 |
813,468 |
344,982 |
225,023 |
570,005 |
Other |
6 |
259,214 |
15,374 |
274,588 |
74,346 |
52,725 |
127,071 |
Revenues |
|
7,607,422 |
449,991 |
8,057,413 |
3,205,982 |
2,094,097 |
5,300,079 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Cost of
inventory sold |
7 |
(4,790,848) |
(851,582) |
(5,642,430) |
(2,151,049) |
(1,670,432) |
(3,821,481) |
Shipping
and packaging expenses |
6 |
(725,728) |
(42,289) |
(768,017) |
(329,439) |
(214,739) |
(544,178) |
Payroll
and outsource staff expenses |
6 |
(749,523) |
(61,912) |
(811,435) |
(404,708) |
(266,851) |
(671,559) |
Advertising expenses |
6 |
(558,651) |
(19,789) |
(578,440) |
(350,223) |
(241,038) |
(591,261) |
Technology expenses |
9 |
(75,462) |
(16,193) |
(91,655) |
(38,961) |
(33,278) |
(72,239) |
Depreciation and amortization |
8 |
(122,750) |
(129,240) |
(251,990) |
(86,532) |
(73,508) |
(160,040) |
Other
operating expenses |
9 |
(212,780) |
(21,099) |
(233,879) |
(393,935) |
(260,411) |
(654,346) |
Other
operating income |
9 |
149,475 |
6,910 |
156,385 |
11,680 |
12,610 |
24,290 |
|
|
|
|
|
|
|
|
Operating Income/(loss) |
|
521,155 |
(685,203) |
(164,048) |
(537,185) |
(653,550) |
(1,190,735) |
|
|
|
|
|
|
|
|
Financial
income |
6 |
479,688 |
23,899 |
503,587 |
420,802 |
307,295 |
728,097 |
Financial
expenses |
6 |
(841,686) |
(59,595) |
(901,281) |
(299,367) |
(193,542) |
(492,909) |
Monetary
gains |
10 |
0 |
370,648 |
370,648 |
0 |
32,479 |
32,479 |
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
159,157 |
(350,251) |
(191,094) |
(415,750) |
(507,318) |
(923,068) |
|
|
|
|
|
|
|
|
Taxation
on income |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Income/(loss) for the period |
|
159,157 |
(350,251) |
(191,094) |
(415,750) |
(507,318) |
(923,068) |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
(Amounts expressed in thousands of Turkish lira (TRY); adjusted
figures in terms of the purchasing power of the TRY at 30 September
2023. Unaudited.) |
|
|
Nine Months Ended |
|
Restatement Method |
Unaudited Unadjusted30 Sept
2023 |
IAS 29Adjustment |
Unaudited Adjusted30 Sept
2023 |
Unaudited Unadjusted30 Sept
2022 |
IAS 29Adjustment |
Unaudited Adjusted30 Sept
2022 |
|
|
|
|
|
|
|
|
Sale of goods (1P) |
6 |
13,177,294 |
2,716,232 |
15,893,526 |
6,726,314 |
5,662,527 |
12,388,841 |
Marketplace revenue (3P) |
6 |
2,396,049 |
518,055 |
2,914,104 |
932,543 |
761,204 |
1,693,747 |
Delivery service revenue |
6 |
1,768,428 |
370,734 |
2,139,162 |
793,100 |
652,981 |
1,446,081 |
Other |
6 |
545,249 |
104,648 |
649,897 |
143,538 |
113,856 |
257,394 |
Revenues |
|
17,887,020 |
3,709,669 |
21,596,689 |
8,595,495 |
7,190,568 |
15,786,063 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Cost of
inventory sold |
7 |
(11,591,401) |
(3,500,031) |
(15,091,432) |
(6,086,856) |
(6,745,925) |
(12,832,781) |
Shipping
and packaging expenses |
6 |
(1,658,786) |
(341,118) |
(1,999,904) |
(892,342) |
(755,805) |
(1,648,147) |
Payroll
and outsource staff expenses |
6 |
(1,814,752) |
(406,071) |
(2,220,823) |
(987,860) |
(836,304) |
(1,824,164) |
Advertising expenses |
6 |
(1,195,290) |
(232,774) |
(1,428,064) |
(1,008,064) |
(868,271) |
(1,876,335) |
Technology expenses |
9 |
(197,684) |
(58,845) |
(256,529) |
(101,060) |
(100,312) |
(201,372) |
Depreciation and amortization |
8 |
(339,183) |
(406,131) |
(745,314) |
(200,563) |
(300,212) |
(500,775) |
Other
operating expenses |
9 |
(542,770) |
(135,511) |
(678,281) |
(556,987) |
(432,761) |
(989,748) |
Other
operating income |
9 |
307,438 |
61,955 |
369,393 |
37,998 |
44,547 |
82,545 |
|
|
|
|
|
|
|
|
Operating Income/(loss) |
|
854,592 |
(1,308,857) |
(454,265) |
(1,200,239) |
(2,804,475) |
(4,004,714) |
|
|
|
|
|
|
|
|
Financial
income |
6 |
2,062,639 |
461,771 |
2,524,410 |
1,334,310 |
1,224,368 |
2,558,678 |
Financial
expenses |
6 |
(1,856,819) |
(354,235) |
(2,211,054) |
(1,005,062) |
(854,802) |
(1,859,864) |
Monetary
gains/(losses) |
10 |
- |
795,379 |
795,379 |
- |
(221,255) |
(221,255) |
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
1,060,412 |
(405,942) |
654,470 |
(870,991) |
(2,656,164) |
(3,527,155) |
|
|
|
|
|
|
|
|
Taxation
on income |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Income/(loss) for the period |
|
1,060,412 |
(405,942) |
654,470 |
(870,991) |
(2,656,164) |
(3,527,155) |
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Amounts expressed in thousands of Turkish lira (TRY); adjusted
figures in terms of the purchasing power of the TRY at 30 September
2023. Unaudited.) |
|
Unaudited |
|
Unaudited |
Unaudited |
|
Unaudited |
|
Unadjusted |
|
Adjusted |
Unadjusted |
|
Adjusted |
|
1 Jan- 30 Sept 2023 |
IAS 29 adjustment |
1 Jan- 30 Sept 2023 |
1 Jan- 30 Sept 2022 |
IAS 29 adjustment |
1 Jan- 30 Sept 2022 |
Income/(loss) before income taxes |
1,060,412 |
(405,942) |
654,470 |
(870,991) |
(2,656,167) |
(3,527,158) |
Adjustments to reconcile income/(loss) before income taxes
to cash flows from operating activities: |
498,556 |
2,908,247 |
3,406,803 |
128,915 |
3,431,629 |
3,560,544 |
Interest and commission expenses |
1,365,971 |
245,387 |
1,611,358 |
609,246 |
488,752 |
1,097,998 |
Depreciation and amortization |
339,183 |
406,131 |
745,314 |
200,563 |
300,212 |
500,775 |
Interest income on time deposits |
(199,509) |
(41,536) |
(241,045) |
(93,871) |
(72,858) |
(166,729) |
Interest income on credit sales |
(170,540) |
(32,730) |
(203,270) |
(65,011) |
(52,222) |
(117,233) |
Provision for unused vacation liability |
51,127 |
12,166 |
63,293 |
12,345 |
10,561 |
22,906 |
Provision for personnel bonus |
112,504 |
26,771 |
139,275 |
68,742 |
58,940 |
127,682 |
Provision for legal cases |
7,122 |
1,694 |
8,816 |
3,626 |
3,108 |
6,734 |
Provision for doubtful receivables |
23,522 |
5,448 |
28,970 |
12,293 |
10,541 |
22,834 |
Provision for impairment of trade goods, net |
34,257 |
57,704 |
91,961 |
8,308 |
(11,641) |
(3,333) |
Provision for post-employment benefits |
32,068 |
7,631 |
39,699 |
2,215 |
1,858 |
4,073 |
Provision for share based payment |
47,471 |
8,857 |
56,328 |
93,969 |
79,100 |
173,069 |
Adjustment for impairment loss of financial investments |
(153,234) |
(45,354) |
(198,588) |
35,505 |
39,440 |
74,945 |
Provision competition board penalty |
(92,018) |
(23,110) |
(115,128) |
- |
- |
- |
Provision for Settlement of Legal Proceedings |
11,577 |
2,755 |
14,332 |
257,874 |
158,670 |
416,544 |
Provision for Turkish Capital Markets Board fee |
23,694 |
5,638 |
29,332 |
- |
- |
- |
Contribution income for settlement |
(108,822) |
- |
(108,822) |
- |
- |
- |
Net foreign exchange differences |
(825,817) |
(170,878) |
(996,695) |
(1,016,008) |
(853,154) |
(1,869,162) |
Non cash charges |
- |
- |
- |
(881) |
(884) |
(1,765) |
Change in provisions due to inflation |
- |
(220,031) |
(220,031) |
- |
(181,803) |
(181,803) |
Monetary
effect on non-operating activities |
- |
2,661,704 |
2,661,704 |
- |
3,453,009 |
3,453,009 |
Changes in net working capital |
|
|
|
|
|
|
Change in trade payables and payables to merchants |
2,995,292 |
(2,934,740) |
60,552 |
673,680 |
(3,023,751) |
(2,350,071) |
Change in inventories |
(1,974,538) |
738,688 |
(1,235,850) |
(451,847) |
1,256,866 |
805,019 |
Change in trade receivables |
(896,589) |
344,312 |
(552,277) |
(49,257) |
175,206 |
125,949 |
Change in contract liabilities and merchant advances |
328,682 |
(318,353) |
10,329 |
214,882 |
(53,340) |
161,542 |
Change in contract assets |
(14,579) |
7,652 |
(6,927) |
(4,154) |
3,666 |
(488) |
Change in other liabilities |
384,896 |
(403,777) |
(18,881) |
130,200 |
(254,575) |
(124,375) |
Change in other assets and receivables |
(308,333) |
312,703 |
4,370 |
(155,083) |
350,641 |
195,558 |
Change in due from related parties |
(2,671) |
857 |
(1,814) |
1,246 |
2,616 |
3,862 |
Change in due to related parties |
960 |
(2,781) |
(1,821) |
(5,137) |
(16,655) |
(21,792) |
Post-employment benefits paid |
(13,874) |
(3,302) |
(17,176) |
(3,672) |
(3,148) |
(6,820) |
Payments for concluded litigation |
(274,240) |
(82,184) |
(356,424) |
(1,040) |
(891) |
(1,931) |
Payments for personnel bonus |
(119,982) |
(39,809) |
(159,791) |
(53,028) |
(59,073) |
(112,101) |
Payments for unused vacation liabilities |
(3,796) |
(875) |
(4,671) |
(1,563) |
(1,322) |
(2,885) |
Collections of doubtful receivables |
121 |
(271) |
(150) |
- |
- |
- |
Net cash provided by/(used in) operating
activities |
1,660,317 |
120,425 |
1,780,742 |
(446,849) |
(848,298) |
(1,295,147) |
Investing activities: |
|
|
|
|
|
|
Purchases
of property and equipment and intangible assets |
(591,490) |
(159,496) |
(750,986) |
(493,392) |
(423,118) |
(916,510) |
Proceeds
from sale of property and equipment |
1,873 |
10,349 |
12,222 |
143 |
336 |
479 |
Purchase
of financial instruments |
(1,064,379) |
(129,806) |
(1,194,185) |
(1,331,152) |
(1,025,126) |
(2,356,278) |
Proceeds
from sale of financial investment |
558,284 |
57,454 |
615,738 |
1,962,379 |
1,512,418 |
3,474,797 |
Interest received on time deposits and financial
instruments |
183,079 |
44,631 |
227,710 |
89,442 |
70,813 |
160,255 |
Interest received on credit sales |
170,540 |
32,730 |
203,270 |
65,011 |
52,222 |
117,233 |
Payment
for acquired businesses, net of cash acquired |
- |
- |
- |
(3,439) |
(3,454) |
(6,893) |
Net cash provided by/(used in) investing
activities |
(742,093) |
(144,138) |
(886,231) |
288,992 |
184,091 |
473,083 |
Financing activities: |
|
|
|
|
|
|
Proceeds
from borrowings |
338,035 |
80,435 |
418,470 |
777,342 |
666,509 |
1,443,851 |
Repayment
of borrowings |
(166,669) |
(39,659) |
(206,328) |
(924,681) |
(792,841) |
(1,717,522) |
Interest
and commission paid |
(1,320,575) |
(234,586) |
(1,555,161) |
(561,516) |
(447,826) |
(1,009,342) |
Lease payments |
(153,898) |
(36,620) |
(190,518) |
(115,836) |
(99,320) |
(215,156) |
Net cash used in financing activities |
(1,303,107) |
(230,430) |
(1,533,537) |
(824,691) |
(673,478) |
(1,498,169) |
Net decrease in cash and cash equivalents |
(384,883) |
(254,143) |
(639,026) |
(982,548) |
(1,337,685) |
(2,320,233) |
Cash and cash equivalents at 1 January |
5,259,801 |
2,622,279 |
7,882,080 |
3,812,605 |
5,572,746 |
9,385,351 |
Inflation effect on cash and
cash equivalents |
- |
(2,538,790) |
(2,538,790) |
- |
(2,630,394) |
(2,630,394) |
Effects of exchange rate
changes on cash and cash equivalents and restricted cash |
816,510 |
170,654 |
987,164 |
638,767 |
529,696 |
1,168,463 |
Cash and cash equivalents at 30 September |
5,691,428 |
- |
5,691,428 |
3,468,824 |
2,134,363 |
5,603,187 |
Restatement Methods for Consolidated Balance
Sheets
(1) Monetary items do not need to be restated,
because they represent money held, to be received or to be paid.
Monetary items are therefore already expressed in current
purchasing power at the reporting date.
(2) Non-monetary assets and liabilities are
restated in terms of the measuring unit current at the end of the
reporting period. We used the increase in the general price index
from the transaction date when they were first recognized to the
end of the reporting period.
(3) Other current assets and other current
liabilities consist of monetary and non-monetary items.
(4) The components of shareholders’ equity,
excluding retained earnings, are restated by applying a general
price index from the dates on which the items were contributed or
otherwise arose.
(5) Retained earnings are restated for the
balancing figure derived from the other amounts in the restated
opening balance sheet.
Restatement Methods for Consolidated
Statements of Comprehensive Loss
(6) All items except cost of inventory sold,
depreciation and amortization expenses and monetary gains or losses
in the consolidated statement of comprehensive loss for the current
year are restated by applying the change in the general price index
from the dates when the items of income and expense were originally
recorded.
(7) Cost of inventory sold is restated by using
restated inventories balance.
(8) Depreciation and amortization expenses is
restated by using restated property and equipment, intangible
assets and right of use assets balances.
(9) Technology expenses, other operating
expenses and income includes prepaid expenses and deferred income
which are considered as non-monetary items and restated by using
restated balances of those items.
(10) The monetary gains or losses is calculated
as the difference between the historical cost amounts and the
result from the restatement of non-monetary items, shareholders’
equity, items in the consolidated statement of comprehensive loss.
The monetary gain or loss is reported as a separate item in the
restated consolidated statement of comprehensive loss.
Restatement Methods for Consolidated
Statements of Cash Flows
All items in the consolidated statements of cash
flows are expressed in a measuring unit current at the balance
sheet date; they are therefore restated by applying the relevant
conversion factors from the date on which the transaction
originated.
Net income / loss before tax is adjusted for the
monetary gain or loss for the period.
The monetary loss on cash and cash equivalents
is presented separately.
Inflation effect on non-operating activities is
presented separately. It is calculated as the difference between
the restated openings and closing balances of cash and cash
equivalents, borrowings and financial investments.
Inflation effect on operating activities is
presented separately. It is calculated as the difference between
the restated openings and closing balances of provisions and
considered as a reconciling item in the cash flow statement, as
this is a non-cash item not shown as a change in working
capital.
Certain Definitions
We provide a number of key operating performance
indicators used by our management and often used by competitors in
our industry. We define certain terms used in this press release as
follows:
-
GMV as gross merchandise value which refers to the
total value of orders/products sold through our platform over a
given period of time (including value added tax (“VAT”) without
deducting returns and cancellations), including cargo income
(shipping fees related to the products sold through our platform)
and excluding other service revenues and transaction fees charged
to our merchants;
- IAS
29-Unadjusted GMV as GMV presented on an unadjusted for
inflation basis;
-
Marketplace GMV as total value of orders/products
sold through our Marketplace over a given period of time (including
VAT without deducting returns and cancellations), including cargo
income (shipping fees related to the products sold through our
platform) and excluding other service revenues and transaction fees
charged to our merchants;
- Share of
Marketplace GMV as the portion of GMV sold through our
Marketplace represented as a percentage of our total GMV;
- IAS
29-Unadjusted Revenue as Revenue presented on an
unadjusted for inflation basis;
- IAS
29-Unadjusted Gross Contribution as Gross Contribution
presented on an unadjusted for inflation basis;
- Gross
Contribution margin as Gross Contribution represented as a
percentage of GMV;
- IAS
29-Unadjusted EBITDA as EBITDA presented on an unadjusted
for inflation basis;
- EBITDA
as a percentage of GMV as EBITDA represented as a
percentage of GMV;
- IAS
29-Unadjusted EBITDA as a percentage of GMV as IAS
29-Unadjusted EBITDA represented as a percentage of IAS
29-Unadjusted GMV;
- Number
of orders as the number of orders we received through our
platform including returns and cancellations;
-
Frequency as the average number of orders per
Active Customer over a 12-month period preceding the relevant
date;
- Active
Merchant as merchants who sold at least one item within
the 12-month period preceding the relevant date, including returns
and cancellations;
- Active
Customer are users (both unregistered users and members)
who have purchased at least one item listed on our platform within
the 12-month period preceding the relevant date, including returns
and cancellations; and
- Digital
products are non-cash games on our platform, such as
sweepstakes and gamified lotteries and the first monthly payment of
Hepsiburada Premium membership subscription.
DISCLAIMER: Due to rounding, numbers presented throughout this
press release may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
About Hepsiburada
Hepsiburada is a leading e-commerce technology
platform in Türkiye, connecting over 61 million members with
approximately 211 million stock keeping units across over 30
product categories. Hepsiburada provides goods and services through
its hybrid model combining first-party direct sales (1P model) and
a third-party marketplace (3P model) with over 101 thousand
merchants.
With its vision of leading the digitalization of
commerce, Hepsiburada acts as a reliable, innovative and
purpose-led companion in consumers’ daily lives. Hepsiburada’s
e-commerce platform provides a broad ecosystem of capabilities for
merchants and consumers including: last-mile delivery and
fulfilment services, advertising services, on-demand grocery
delivery services, and payment solutions offered through Hepsipay,
Hepsiburada’s payment companion and BNPL solutions provider.
HepsiGlobal offers a selection from international merchants through
its inbound arm while outbound operations aim to enable merchants
in Türkiye to make cross-border sales.
Since its founding in 2000, Hepsiburada has been
purpose-led, leveraging its digital capabilities to develop the
role of women in the Turkish economy. Hepsiburada started the
‘Technology Empowerment for Women Entrepreneurs’ programme in 2017,
which has supported over 47.5 thousand female entrepreneurs
throughout Türkiye to reach millions of customers with their
products.
Investor Relations Contact
ir@hepsiburada.com
Media Contact
corporatecommunications@hepsiburada.com
Forward Looking Statements This
press release, the conference call webcast, presentation and
related communications include forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as
amended and the Safe Harbor provisions of the US Private Securities
Litigation Reform Act of 1995, and encompasses all statements,
other than statements of historical fact contained in these
communications, including but not limited to statements regarding
(a) our future financial performance, including our revenue,
operating expenses and our ability to achieve and maintain
profitability; (b) our expectations regarding current and future
GMV and EBITDA; (c) potential disruptions to our operations and
supply chain that may result from (i) epidemics or natural
disasters; (ii) global supply challenges; (iii) the ongoing
conflict in Ukraine; (iv) changes in the competitive landscape in
the industry in which the Company operates; (v) the rising
inflationary environment and/or (vi) currency devaluation; (d) the
anticipated launch of new initiatives, businesses or any other
strategic projects; (e) our expectations and plans for short- and
long-term strategy, including our anticipated areas of focus and
investment, market expansion, product and technology focus, and
projected growth and profitability; (f) our ability to respond to
the ever-changing competitive landscape in the industry in which we
operate; (g) our liquidity, substantial indebtedness, and ability
to obtain additional financing; (h) our strategic goals and plans,
including our relationships with existing customers, suppliers,
merchants and partners, and our ability to achieve and maintain
them; (i) our ability to improve our technology platform, customer
experience and product offerings to attract and retain merchants
and customers; (j) our ability to expand our base of Hepsiburada
Premium members, and grow and externalize the services of our
strategic assets; and (k) regulatory changes in the e-commerce law.
These forward-looking statements can be identified by terminology
such as “may”, “could”, “will,” “seek,” “expects,” “anticipates,”
“aims,” “future,” “intends,” “plans,” “believes,” “estimates,”
“targets”, “likely to” and similar statements. Among other things,
quotations from management in this announcement, as well as our
outlook and guidance, strategic and operational plans, contain
forward-looking statements.
These forward-looking statements are based on
management’s current expectations. However, it is not possible for
our management to predict all risks, nor can we assess the impact
of all factors on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. These statements are neither promises nor guarantees
but involve known and unknown risks, uncertainties and other
important factors and circumstances that may cause Hepsiburada’s
actual results, performance or achievements to be materially
different from its expectations expressed or implied by the
forward-looking statements, including conditions in the U.S.
capital markets, negative global economic conditions, potential
negative developments resulting from epidemics or natural
disasters, other negative developments in Hepsiburada’s business or
unfavorable legislative or regulatory developments. We caution you
therefore against relying on these forward-looking statements, and
we qualify all of our forward-looking statements by these
cautionary statements. For a discussion of additional factors that
may affect the outcome of such forward looking statements, see our
2022 annual report filed with the SEC on Form 20-F (File No.
001-40553), and in particular the “Risk Factors” section, as well
as the other documents filed with or furnished to the SEC by the
Company from time to time. Copies of these filings are available
online from the SEC at www.sec.gov, or on the SEC Filings section
of our Investor Relations website at
https://investors.hepsiburada.com. These and other important
factors could cause actual results to differ materially from those
indicated by the forward-looking statements made in this press
release. Any such forward-looking statements represent management’s
estimates as of the date of this press release. These
forward-looking statements should not be relied upon as
representing the Company’s views as of any date subsequent to the
date of this press release. All forward-looking statements in this
press release are based on information currently available to the
Company, and the Company and its authorized representatives assume
no obligation to update these forward-looking statements in light
of new information or future events. Accordingly, undue reliance
should not be placed upon the forward-looking statements.
Non-IFRS Financial MeasuresThis
press release includes certain non-IFRS financial measures,
including but not limited to, Gross Contribution, EBITDA, IAS
29-Unadjusted Revenue, IAS 29-Unadjusted Gross Contribution, IAS
29-Unadjusted EBITDA, Free Cash Flow and Net Working Capital. These
financial measures are not measures of financial performance in
accordance with IFRS and may exclude items that are significant in
understanding and assessing our financial results. Therefore, these
measures should not be considered in isolation or as an alternative
to profit/loss for the period or other measures of profitability,
liquidity or performance under IFRS. You should be aware that the
Company’s presentation of these measures may not be comparable to
similarly titled measures used by other companies, which may be
defined and calculated differently. See “Presentation of Financial
and Other Information” in this press release for a reconciliation
of certain of these non-IFRS measures to the most directly
comparable IFRS measure.
Statement Regarding Unaudited Financial
InformationThis press release includes unaudited quarterly
financial information as of and for the nine months ended September
30, 2023 and 2022 and as of and for the year ended December 31,
2022. The quarterly information has not been audited or reviewed by
the Company’s auditors. The unaudited consolidated financial
statements include the accounts of the Company and its
subsidiaries. All periods presented have been accounted for in
conformity with IFRS and pursuant to the regulations of the
SEC.
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