• Hepsiburada Announces First Quarter 2024 Financial Results

    المصدر: Nasdaq GlobeNewswire / 13 يونيو 2024 07:00:32   America/New_York

    ISTANBUL, Türkiye, June 13, 2024 (GLOBE NEWSWIRE) -- D-MARKET Electronic Services & Trading (d/b/a “Hepsiburada”) (NASDAQ: HEPS), a leading Turkish e-commerce platform (referred to herein as “Hepsiburada” or the “Company”), today announces its unaudited financial results for the first quarter ended March 31, 2024.

    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 March 31, 2024, 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 March 31, 2024. 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 March 31, 2024 are as follows:

    DateIndexConversion Factor
    31 March 20242,139.51.00
    31 December 20231,859.41.15
    31 March 20231,269.81.68

    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.

    First Quarter 2024 Financial and Operational Highlights

    (All financial figures are restated pursuant to IAS 29 unless otherwise indicated)

    • Gross merchandise value (GMV) increased by 42.5% to TRY 36.3 billion compared to TRY 25.5 billion in Q1 2023.
      • IAS 29-Unadjusted GMV increased by 137.8% to TRY 35.2 billion compared to Q1 2023.
    • Revenue increased by 45.0% to TRY 11,309.6 million compared to TRY 7,800.5 million in Q1 2023.
    • Number of orders increased by 21.7% to 29.3 million compared to 24.1 million orders in Q1 2023.
    • Active Customers increased by 1.4% to 12.1 million compared to 11.9 million as of March 31, 2023.
    • (Order) Frequency increased by 30.3% to 9.8 compared to 7.5 as of March 31, 2023.
    • Active Merchant base increased by 1.2% to 101.9 thousand compared to 100.7 thousand as of March 31, 2023.
    • Number of SKUs increased by 37.9% to 248.2 million compared to 180.0 million as of March 31, 2023.
    • Share of Marketplace GMV was 68.4% compared to 68.2% in Q1 2023.
    • EBITDA improved to TRY 289.4 million compared to TRY 12.2 million in Q1 2023. Accordingly, EBITDA as a percentage of GMV was at 0.8%, a 0.7 percentage point improvement compared to 0.05% in Q1 2023.
      • IAS 29-Unadjusted EBITDA improved to TRY 835.3 million compared to TRY 175.9 million in Q1 2023. IAS 29-Unadjusted EBITDA as a percentage of GMV in Q1 2024 improved by 1.2 percentage points to 2.4% compared to 1.2% in Q1 2023.
    • Net loss for the period was TRY 130.7 million compared to a net loss of TRY 324.9 million for Q1 2023.
    • Free cash flow was positive TRY 1,029.6 million compared to negative TRY 259.3 million in Q1 2023.

    Commenting on the results, Nilhan Onal Gökçetekin, CEO of Hepsiburada said:

    “We are glad to have had a robust start to the year across the business, following a year of turnaround in profitability in 2023. In the first quarter, we continued to execute on our strategic priorities with a focus on strengthening our core operations, leveraging our key strengths for on-platform and off-platform operations and prudent cost management. Our efforts, accelerated by the base effect of last year due to the tragic earthquake, drove a 137.8% year-on-year GMV growth on an unadjusted basis. Meanwhile, we recorded 2.4% EBITDA as a percentage of GMV representing a 1.2 percentage point yearly rise on an unadjusted basis, a clear sign that our strategy is working.

    During the quarter, we continued our initiatives to improve user experience by leveraging advancing technology and strengthening our appealing value proposition through diverse affordability and lending solutions. These have resulted in competitive NPS metrics, marking Hepsiburada as the most recommended e-commerce brand in Türkiye once again. Our appeal is also evidenced by a 30% year-on-year rise in order frequency and firm traction with Hepsiburada Premium program enrollment, exceeding 2.6 million members by the end of May 2024.

    Merchants’ preference for our last-mile delivery services has sustained its uptrend, whereby HepsiJet delivered 68% of total parcels on our platform, up by 5.1 percentage points year-on-year. With its fast and reliable service quality, HepsiJet also more than doubled its external delivery volume year-on-year, corresponding to a third of its total volume.

    On the fintech front, we cemented our pioneering credentials in the market by expanding the suite of affordability and lending solutions that our customers have come to rely on in today’s economic landscape. January marked a milestone for our Company as we launched our in-house consumer finance loan facility. Including financing from partner banks, the total financed transaction volume through our platform reached TRY 8.1 billion by the end of the first quarter. On the payments front, with Hepsipay, online shopping becomes a seamless one-click process. We believe Hepsipay is on the right path to becoming Türkiye’s leading digital wallet with its 15.7 million Hepsipay wallet customers and 18.3 million stored cards, already integrated into the check-out of 28 retailers.

    It is important to note that we are in a challenging macroeconomic conjuncture with certain repercussions for consumers. And yet, our platform preserves our relevance for consumers’ purchases as their trusted household brand. Our well-defined strategic priorities built on solid fundamentals allow us to pursue sustainable and profitable growth. As we continue to execute along these lines, we anticipate delivering GMV growth of around 75% in Q2 2024 compared to the same quarter of last year, on an unadjusted basis. With continued strict cost management in place, we expect an EBITDA within the range of 1.8% to 2.0% of GMV on an unadjusted basis in Q2 2024.

    I thank our formidable team for their dedication, our loyal customers for their trust in our brand, our partners for their collaboration and support, and our shareholders for their belief in our vision.”

    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 March 31, 2024 and March 31, 2023 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 March 31,
    unaudited
    20242023y/y %
    GMV (TRY in billion)36.325.542.5%
    Marketplace GMV (TRY in billion)24.817.442.8%
    Share of Marketplace GMV (%)68.4%68.2%0.2pp
    Number of orders (million)29.324.121.7%
    Active Customers (million)12.111.91.4%
    Revenue11,309.67,800.545.0%
    Gross Contribution3,804.02,374.360.2%
    Gross Contribution margin (%)10.5%9.3%1.2pp
    Net loss for the period(130.7)(324.9)(59.8%)
    EBITDA289.412.22,272.1%
    EBITDA as a percentage of GMV (%)0.8%0.0%0.7pp
    Net cash provided by operating activities1,455.7101.51,334.2%
    Free Cash Flow1,029.6(259.3)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.

    Q2 2024 Outlook

    The below forward-looking statements reflect Hepsiburada’s expectations as of June 13, 2024, considering year-to-date trends that 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 factors which may impact the current outlook, including the inflationary environment both in Türkiye and globally, local currency volatility, further tightening in monetary policy, low consumer confidence, pressure on purchasing power, regional geopolitical headwinds, the 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 second quarter of 2024, we expect to deliver IAS 29-Unadjusted GMV growth of around 75% compared to the second quarter of 2023 and IAS 29-Unadjusted EBITDA as a percentage of GMV within the range of 1.8% to 2.0%.

    In 2024, we intend to remain focused on sustainable and profitable growth with a prudent approach to capital allocation.

    Business and Strategy Highlights

    As of March 31, 2024, the annual inflation rate published by TurkStat was 68.5%, up from 50.5% as of March 31, 2023, and 64.8% as of the end of 2023. The monthly inflation rates during the first quarter of 2024 were 6.7%, 4.5% and 3.2% in January, February and March, respectively. The Consumer Confidence Index fell by nearly 0.7 points on a yearly basis to 79.4 as of March 31, 2024.

    In Q1 2024, IAS 29-Unadjusted GMV increased by 137.8% to TRY 35.2 billion compared to TRY 14.8 billion in Q1 2023, exceeding our guidance of approximately 120% by nearly 18 percentage points. Adjusted for inflation, GMV increased by 42.5% to TRY 36.3 billion in Q1 2024 compared to TRY 25.5 billion in Q1 2023. The earthquake in Q1 2023 acted as a favorable comparable base for Q1 2024.

    For Hepsiburada, GMV growth is a function of the growth in the number of orders and average order value. In Q1 2024, we experienced order growth of 21.7% compared to Q1 2023, resulting from the continued rise in order frequency and number of Active Customers. Meanwhile, average order value grew by 95.4% in Q1 2024 compared to Q1 2023, outpacing average inflation of 68.5% as of March 31, 2024. The faster average order value growth is attributable mainly to the faster-than-inflation rise in average selling prices in Q1 2024, partially boosted by the VAT increase in 2023.

    Overall, our performance was also supported by the appeal of our Hepsiburada Premium loyalty program, attractive affordability solutions and data-driven marketing campaigns. Our Net Promoter Score (“NPS”) of 73 in Q1 2024 compared to 70 in Q4 2023 (according to the results of market research conducted by FutureBright on behalf of Hepsiburada) positioned us, once again, as the number one most recommended e-commerce platform in Türkiye.

    In 2024, we remain committed to executing our strategic priorities set in 2023 with minor adjustments to enhance our approach. Currently, our strategic priorities include: a) nurturing loyalty, b) capitalizing on our clear differentiation of superior delivery services, c) capitalizing on our clear differentiation with affordability and lending solutions and d) offering our payment, lending and last-mile services to third parties.

    The discussion below elaborates on our progress in Q1 2024 within each of our strategic priorities:

    a) Nurturing loyalty

    • Central to our strategy is prioritizing customer loyalty and retention. Our loyalty program, Hepsiburada Premium, has played a key role in achieving this. Meanwhile, focusing on retention has helped us to reduce and optimize our marketing and advertising spend.
    • Hepsiburada Premium members almost tripled, reaching 2.5 million by the end of Q1 2024 compared to 915 thousand by the end of Q1 2023. By the end of May 2024, the total number of members had reached 2.6 million.
    • Hepsiburada Premium members continue to generate higher order frequency than non-members. In Q1 2024, the monthly order frequency for members was 36% higher than the order frequency generated before joining the program.
    • Hepsiburada Premium members’ NPS was 81 in Q1 2024, according to the results of market research conducted by the research company FutureBright on behalf of Hepsiburada. This score remains higher than the Company’s overall NPS, which we believe signifies a strong satisfaction level among members.

    b) Capitalizing on our clear differentiation with superior delivery services

    • In Q1 2024, HepsiJet continued offering competitive services, including our oversized delivery services that differentiate us in the market. We believe that swift delivery is a core customer expectation and, in Q1 2024, HepsiJet delivered 82% of the orders placed through our retail arm (1P) within the next day (compared to 84% in Q1 2023).
    • HepsiJet is also a key component of our value proposition for our merchants. In Q1 2024, HepsiJet delivered approximately 68% of our total parcels (compared to 63% in Q1 2023).
    • In Q1 2024, HepsiJet had a customer satisfaction score of 87 according to our internal survey results, underscoring its service excellence. Through HepsiJet, our customers enjoy flexible delivery options and value added services including return from doorstep for all purchases on our platform.
    • Our oversized package delivery service (HepsiJet XL) delivered 63% of oversized parcels ordered through our platform in Q1 2024, up from 60% in Q1 2023.

    c) Capitalizing on our clear differentiation with affordability and lending solutions

    • Leveraging our e-money and payment services licenses, we offer a comprehensive suite of payment and affordability solutions on the Hepsiburada platform as well as externally to other partner retailers.
    • In January 2024, we took a further step to include our in-house consumer finance loans in our affordability solutions offering. By May 31, 2024, our wholly-owned subsidiary, Hepsifinans, had provided over TRY 280 million in loans since its launch.
    • As of March 31, 2024, our BNPL solution had been used by over 365 thousand customers. Approximately 1.1 million orders have been processed through our non-card affordability solutions (including BNPL and shopping loans) over the past 12 months. Meanwhile, our total financed transaction volume (including general purpose loans and consumer finance loans) reached TRY 8.1 billion, with 55% of this volume generated through our BNPL solution in Q1 2024 compared to 30% in Q1 2023. In Q1 2024, orders made through our BNPL solution and shopping loans accounted for 4.9% of total GMV in the period, down from 5.6% in Q4 2023. This was mainly due to lower lending willingness among banks combined with higher card-based campaigns in number throughout February and March with the expectation of a potential tightening of credit card solutions following the Turkish elections in March 2024. We diligently manage credit risk in our BNPL solution, while maintaining our focus on growth optimization.
    • As of March 31, 2024, our wallet and payment gateway solution, Hepsipay, registered approximately 15.3 million Hepsipay wallet customers (representing users who have opened their wallet account by giving the required consent to Hepsipay), up from 14.3 million as of March 31, 2023. As of May 31, 2024, the number of Hepsipay wallet customers had reached 15.7 million. Additionally, 18.3 million cards are stored in the wallets of Hepsipay customers.
    • As of March 31, 2024, 1.3 million Hepsipay prepaid cards had been issued through the Hepsiburada mobile app. The Hepsipay prepaid card is linked to the QR payment feature which allows customers to use it at any off-line retailer that accepts QR payments. As of May 31, 2024, the number of Hepsipay cards issued exceeded 1.4 million. The option for Hepsipay prepaid card holders to top up their e-wallets by way of general purpose loans is available from six leading banks in Türkiye. In April 2024, the automatic top-up feature went live in the digital wallet.

    d) Offering payment, lending and last-mile delivery services to third parties

    • We believe that 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 both Hepsipay and HepsiJet to leverage their own assets and increase their revenue contribution to our company.
    • HepsiJet today serves over two thousand external customers, including household-name retailers. 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 increased to 32.6% in Q1 2024, up from 22.1% in Q1 2023. The total parcel volume of third parties delivered in Q1 2024 is 2.3 times the volume in Q1 2023.
    • As of March 31, 2024, following the product launch in July 2023, Hepsipay’s one-click check-out (“Pay with Hepsipay”) offering was successfully integrated into the online checkout of 28 retailers. By enabling payment with cards stored on the Hepsipay wallet, Hepsipay has gained a share of these retailers’ online sales. We believe that the envisaged growth in one-click checkout integrations will become instrumental in Hepsipay’s off-platform expansion.

    ESG Actions

    • In Q1 2024, Hepsiburada continued to provide support in social, commercial and economic areas.
    • Our “Trade and Technology Empowerment for the Earthquake Region” program, launched in March 2023 following the earthquake, reached approximately 17,340 merchants, with over 3,775 new businesses now selling their products online through Hepsiburada. Active sellers generated a trade volume exceeding TRY 5.2 billion. Our E-Commerce Specialization Centers in Adana and Hatay support existing merchants and organize training courses and programs for those new to the e-commerce market, benefiting over a thousand merchants from the region.
    • In February 2024, to commemorate the first anniversary of the earthquake, Hepsiburada launched a campaign as part of our “A Smile is Enough” project pledging to donate toys and books to children for every order placed by customers on its platform regardless of the order value. Through our “A Smile is Enough” project, Hepsiburada has reached 235,500 children living in the affected region. Further, Hepsiburada celebrated February 11, the International Day of Women and Girls in Science, with high school students at Ahbap Association’s science trucks in the earthquake region, organizing various trainings.
    • The “Technology Empowerment for Women Entrepreneurs” (“TEWE”) program reached an additional 2,506 women. To date, the TEWE program has supported approximately 53 thousand women entrepreneurs. Furthermore, as of March 31, 2024, the number of women’s cooperatives on our platform has reached 267.
    • As part of the TEWE program, various NGO collaborations have been established to provide sustainable support to the earthquake zone. As of March 31, 2024, the number of women entrepreneurs and women’s cooperatives in the impacted region had reached 3,419 and 40, respectively.
    • As part of our ongoing social responsibility projects, Hepsiburada has continued to provide food, medical supplies, and logistics support to animal welfare associations.

    Subsequent Events

    Hepsiburada issued asset-backed securities amounting to TRY 150 million

    The first issuance of asset-backed securities amounting to TRY 150 million, within the scope of the TRY 2 billion limit given by the Capital Markets Board to Pasha Yatırım Bank Hepsiburada Varlık Finansmanı Fonu, settled on June 5, 2024. In this structure, Hepsiburada participated as the originating entity with respect to its BNPL receivables. The issue consists of four tranches with a maximum maturity of 147 days and at an annual interest rate varying between 54% to 57% depending on the maturity. Hepsiburada intends to use the funds raised through this issue to sustainably grow its BNPL business and reduce its impact on working capital.

    Hepsiburada and Jumia join forces to unlock broader product selection for African and Turkish consumers

    In June 2024, Hepsiburada entered into a commercial partnership with Jumia Technologies AG (NYSE: JMIA) (“Jumia”) pursuant to which Hepsiburada will facilitate access to the Turkish market for merchants based in Africa by giving such merchants the opportunity to sell their products via Hepsiburada’s e-commerce platform to customers in Türkiye. Further, the partnership allows Hepsiburada to sell its private label products together with a selection of other Turkish brands on Jumia’s platform in certain countries in the African region in which Jumia operates.

    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 are reported in terms of the measuring unit current as of the reporting date of the financial statements. All 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. 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 income/(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 on March 31, 2024 (in accordance with IAS 29) unless otherwise indicated.

    (in TRY million
    unless otherwise indicated)
    		Three months ended March 31,
    unaudited 
    20242023y/y %
    GMV (TRY in billion)36.325.542.5%
    Marketplace GMV (TRY in billion)24.817.442.8%
    Share of Marketplace GMV (%)68.4%68.2%0.2pp
    Revenue11,309.67,800.545.0%
    Gross Contribution3,804.02,374.360.2%
    Gross Contribution margin (%)10.5%9.3%1.2pp
    Net loss for the period(130.7)(324.9)(59.8%)
    EBITDA289.412.22,272.1%
    EBITDA as a percentage of GMV (%)0.8%0.0%0.7pp
    Net cash provided by operating activities1,455.7101.51,334.2%
    Free Cash Flow1,029.6(259.3)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 March 31,
    20242023y/y %
    Sale of goods1 (1P)      7,815.6     5,676.437.7%
    Marketplace revenue2 (3P)      1,470.5     1,117.231.6%
    Delivery service revenue      1,602.3        821.995.0%
    Other         421.3        185.0127.7%
    Revenue11,309.67,800.545.0%

    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 45.0% to TRY 11,309.6 million in Q1 2024 compared to TRY 7,800.5 million in Q1 2023. This was mainly due to a 37.7% increase in our (1P) revenue (comprising 69.1% of total revenue) and a 31.6% increase in Marketplace revenue (3P) (comprising 13.0% of total revenue), compared to Q1 2023. Our delivery service revenue, comprising 14.2% of total revenue, rose by 95.0% compared to Q1 2023. Meanwhile, other revenue increased by 127.7% compared to Q1 2023 primarily as a result of a 102.3% growth in our advertising services (HepsiAd) and a 4.1x growth in our Hepsiburada Premium subscription revenues in addition to the rise in our fulfillment service revenues.

    While GMV increased by 42.5% in Q1 2024 compared to Q1 2023, the 1P and 3P revenue growth during this period was 36.7%. Faster GMV growth compared to revenue growth was due mainly to the increase in VAT across all goods and services in early July 2023, resulting in an increase in average selling prices throughout the platform.

    The 95.0% increase in delivery service revenue compared to Q1 2023 was mainly due to i) a significant increase in delivery service revenue from the off-platform customers of Hepsijet, ii) annual rises in unit delivery service charges to our merchants (surpassing inflation), and iii) an increase in the number of parcels delivered.

    Gross Contribution

    (in TRY million unless indicated otherwise, unaudited)Three months ended March 31,
    20242023y/y %
    Revenue11,309.67,800.545.0%
    Cost of inventory sold(7,505.6)(5,426.2)38.3%
    Gross Contribution3,804.02,374.360.2%
    Gross Contribution margin (% of GMV)10.5%9.3%1.2pp

     

    The Gross Contribution margin improved by 1.2pp to 10.5% in Q1 2024 compared to 9.3% in Q1 2023. This margin improvement was mainly attributable to a 1.2pp increase in delivery service revenue from off-platform customers and a 0.4pp improvement derived from higher other revenue, partially offset by a 0.3pp decline in the 3P margin (due to lower promotional activity in Q1 2023 after the earthquake in February) and a 0.1pp decline in the 1P margin mainly due to the impact of higher inflation on inventories.

    The table below shows the monthly inflation rates in 2024 and 2023.

    Consumer inflation
    Monthly (2003=100)    		JanFebMarAprMay JunJul Aug Sep Oct Nov Dec
    2024 7%5%3%---------
    20237%3%2%2%0%4%9%9%5%3%3%3%

    Source: Data as announced by TurkStat

    Operating Expenses

    The table below shows our operating expenses for the three months ended March 31, 2024 and 2023 in absolute terms and as a percentage of GMV:

    (in TRY million unless indicated otherwise, unaudited)Three months ended March 31,
    20242023y/y%
    Cost of inventory sold(7,505.6)(5,426.2)38.3%
    % of GMV(20.7%)(21.3%)0.6pp
    Shipping and packaging expenses(1,227.0)(743.3)65.1%
    % of GMV(3.4%)(2.9%)(0.5pp)
    Payroll and outsource staff expenses(1,197.2)(824.0)45.3%
    % of GMV(3.3%)(3.2%)(0.1pp)
    Advertising expenses(714.8)(476.8)49.9%
    % of GMV(2.0%)(1.9%)(0.1pp)
    Technology expenses(130.5)(101.0)29.2%
    % of GMV(0.4%)(0.4%)0.0pp
    Depreciation and amortization(387.2)(299.7)29.2%
    % of GMV(1.1%)(1.2%)0.1pp
    Other operating expenses, net(245.2)(216.9)13.0%
    % of GMV(0.7%)(0.9%)0.2pp
    Net operating expenses(11,407.5) (8,087.9)41.0%
    Net operating expenses as a % of GMV(31.4%)(31.8%)0.3pp

    Net operating expenses increased by 41.0% to TRY 11,407.5 million in Q1 2024 compared to TRY 8,087.9 million in Q1 2023. As a percentage of GMV, our net operating expenses declined 0.3pp mainly due to a 0.6pp decrease in cost of inventory sold, a 0.2pp decrease in other operating expenses, net, and a 0.1pp decrease in depreciation and amortization, in each case as a percentage of GMV. This was partially offset by a 0.5pp rise in shipping and packaging expenses, a 0.1pp rise in advertising expenses and a 0.1pp rise in payroll and outsource staff expenses, in each case as a percentage of GMV.

    The 0.6pp decrease in cost of inventory sold as a percentage of GMV was mainly due to i) a 0.2pp shift in GMV mix towards Marketplace, and ii) the increase in VAT across all goods and services in early July 2023.

    The 0.5pp increase in shipping and packaging expenses as a percentage of GMV was mainly driven by the increase in the number of parcels delivered (including those of HepsiJet’s off-platform customers) and a rise in delivery fees per unit, outpacing the average inflation in Q1 2024 compared to Q1 2023.

    Financial Income

    (in TRY million, unaudited)Three months ended March 31,
    20242023y/y %
    Foreign currency exchange gains342.0109.0213.8%
    Interest income on credit sales284.263.6346.9%
    Interest income on time deposits145.877.089.4%
    Fair value gains on financial assets measured at fair value39.41.52,493.6%
    Interest income on financial investments0.70.0n.m.
    Other7.021.3(66.7%)
    Financial income819.1272.4200.7%

    Our financial income increased by 200.7%, or TRY 546.7 million, to TRY 819.1 million in Q1 2024 compared to TRY 272.4 million in Q1 2023. The rise in financial income was mainly driven by the increase in interest income on credit sales and time deposits as a result of higher annual interest rates. The TRY 233.0 million increase in foreign currency exchange gains from our U.S. dollar denominated bank deposits and financial investments due to the higher U.S. dollar/TRY appreciation during Q1 2024 compared to Q1 2023 also contributed to the increase in interest income.

    Financial Expenses

    (in TRY million, unaudited)Three months ended March 31,
    20242023y/y %
    Commission expenses due to early collection of credit card receivables(724.7)(321.2)125.6%
    Interest expenses on purchases(364.8)(54.5)569.4%
    Foreign currency exchange losses(150.7)(87.6)72.0%
    Interest expenses on bank borrowings and lease liabilities(99.1)(61.7)60.6%
    Other(4.2)(0.7)500.0%
    Financial expenses(1,343.5)(525.7)155.6%

    Our financial expenses increased by 155.6%, or TRY 817.8 million, to TRY 1,343.5 million in Q1 2024 compared to TRY 525.7 million in Q1 2023, primarily attributable to a TRY 403.5 million increase in commission expenses due to early collection of credit card receivables and a TRY 310.3 million increase in interest expenses on purchases as a result of a rise in annual effective interest rates and an increase in purchased goods during Q1 2024, each compared to Q1 2023.

    Net Loss for the Period

    Net loss for the period was TRY 130.7 million in Q1 2024, down from a net loss of TRY 324.9 million in Q1 2023. This was mainly attributable to TRY 277.1 million improvement in EBITDA and TRY 275.5 million in monetary gain against TRY 271.0 million increase in net financial expenses (net of financial income) and TRY 87.5 million increase in depreciation and amortization.

    EBITDA

    EBITDA was TRY 289.4 million in Q1 2024 compared to TRY 12.2 million in Q1 2023, corresponding to 0.8% EBITDA as a percentage of GMV in Q1 2024. This corresponded to a 0.7pp improvement in EBITDA as a percentage of GMV in Q1 2024 compared to Q1 2023. This improvement was driven by a 1.2pp rise in Gross Contribution margin and a 0.2pp decline in other operating expenses, net as a percentage of GMV, partially offset by a 0.5pp rise in shipping and packaging expenses and a 0.1pp rise in advertising expenses and a 0.1pp rise in payroll and outsource staff expenses, in each cases a percentage of GMV.

    Net Working Capital

    Net working capital was negative TRY 6,465.1 million as of March 31, 2024 compared to negative TRY 6,796.3 million as of December 31, 2023. The TRY 331.2 million change in negative net working capital was mainly driven by a TRY 231.3 million increase in trade receivables, a TRY 271.0 million increase in inventories and a TRY 189.5 million decrease in trade payables and payables to merchants; partially offset by a TRY 197.5 million increase in contract liabilities and merchant advances and TRY 128.0 million increase in wallet deposits. The increase in trade receivables was mainly due to a higher BNPL and credit card receivables balance. The increase in inventories was due to longer inventory turnover days as of March 31, 2024 compared to December 31, 2023. The increase in contract liabilities and merchant advances was mainly due to undelivered orders as of March 31, 2024 as a result of high number of orders in the last week of March, while the decrease in trade payables resulted primarily from a shift in the 1P GMV mix towards categories with shorter payment terms.

    Cash Flow from Operating Activities

    Our net cash provided by operating activities in Q1 2024 at TRY 1,455.7 million comprised a TRY 130.7 million net loss (Q1 2023: net loss of TRY 324.9 million), a negative TRY 443.0 million change in negative net working capital (Q1 2023: negative TRY 1,220.9 million) and a TRY 2,029.5 million change in other items (comprising non-cash items such as provisions and depreciation expenses as well as certain non-operating items such as financial income & expenses, non-operating monetary gains & losses and unrealized foreign exchange differences) (Q1 2023: TRY 1,647.2 million). The change in net working capital is further disclosed in the “Net Working Capital” section.

    Net cash provided by operating activities rose by TRY 1,354.3 million to TRY 1,455.7 million in Q1 2024 compared to net cash provided by operating activities in Q1 2023 of TRY 101.5 million. This was mainly due to a strong EBITDA performance of TRY 277.1 million and increase in change in net working capital of TRY 777.8 million.

    Free Cash Flow

    Our free cash flow increased to TRY 1,029.6 million in Q1 2024 from negative TRY 259.3 million in Q1 2023. The TRY 1,288.9 million improvement was mainly due to the increase in cash flows generated from operating activities offset by TRY 65.4 million increase in capex.

    Total Cash and Financial Investments

    Total cash and cash equivalents was at TRY 3,562.9 million as of March 31, 2024 compared to TRY 6,328.5 million as of December 31, 2023. The TRY 2,765.6 million decrease was mainly due to higher cash used in financing activities and purchases of financial investments and slower appreciation of the USD/TRY exchange rate against the three-month inflation.

    Total financial investments as of March 31, 2024 amounted to TRY 4,402.9 million compared to TRY 1,982.3 million as of December 31, 2023. Our financial investments consist of a financial asset measured at fair value through profit or loss and financial assets carried at amortized costs, including investment funds and Eurobonds.

    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 313.5 million as of March 31, 2024, from TRY 211.1 million as of December 31, 2023. As of March 31, 2024, supplier and merchant financing loans corresponded to TRY 53.4 million of the short-term bank borrowings compared to TRY 20.4 million as of December 31, 2023. Our long-term borrowings decreased from TRY 3.2 million as of December 31, 2023 to TRY 1.2 million as of March 31, 2024.

    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, Thursday, June 13, 2024 at 4.00 p.m. Istanbul time / 2.00 p.m. London / 9.00 a.m. New York time.

    The live webcast can be accessed via https://87399.themediaframe.eu/links/hepsiburada240613.html

    Telephone Participation Dial in Details:

    •Türkiye:+ 90 212 900 3719
    •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 June 13, 2024.

    Replay: Following the call, a replay will be available on the Hepsiburada Investor Relations website https://investors.hepsiburada.com

    D-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 31 March 2024 unless otherwise indicated.)

     31 March 2024
     (unaudited)    		31 December 2023
     (unaudited)
       
    ASSETS  
    Current assets:  
    Cash and cash equivalents3,562,8706,328,500
    Restricted cash102,642192,516
    Financial investments4,402,8741,982,251
    Trade receivables2,962,0442,730,777
    Due from related parties10,00410,566
    Loan receivables46,866-
    Inventories4,833,2474,562,258
    Contract assets34,03625,810
    Other current assets891,832994,510
       
    Total current assets16,846,41516,827,188
       
    Non-current assets:  
    Property and equipment575,595578,474
    Intangible assets2,220,4092,132,803
    Right of use assets629,783650,712
    Loan receivables10,853920
    Other non-current assets35,56938,800
       
    Total non-current assets3,472,2093,401,709
       
    Total assets20,318,62420,228,897
     

    LIABILITIES AND EQUITY    		  
    Current liabilities:  
    Bank borrowings313,479211,109
    Lease liabilities128,595177,858
    Wallet deposits344,816216,794
    Trade payables and payables to merchants11,964,64312,154,170
    Due to related parties6,6905,337
    Provisions83,41394,039
    Employee benefit obligations190,998333,006
    Contract liabilities and merchant advances1,836,5611,639,043
    Other current liabilities918,558870,329
       
    Total current liabilities15,787,75315,701,685
       
    Non-current assets:  
    Bank borrowings1,1513,232
    Lease liabilities182,454140,170
    Employee benefit obligations111,222119,992
    Other non-current liabilities541,415463,520
       
    Total non-current liabilities836,242726,914
     

    Equity:    		  
    Share capital573,777573,777
    Other capital reserves758,899733,805
    Share premiums16,665,08816,665,088
    Treasury shares(195,427)(195,427)
    Accumulated deficit(14,107,708)(13,976,945)
       
    Total equity 3,694,6293,800,298
    Total equity and liabilities20,318,62420,228,897


    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 31 March 2024 unless otherwise indicated. Unaudited.)

     Three months ended
     31 March
     2024    		31 March
     2023
     (unaudited)(unaudited)
       
    Revenues11,309,6337,800,470
       
    Operating expenses  
    Cost of inventory sold(7,505,589)(5,426,189)
    Shipping and packaging expenses(1,226,951)(743,339)
    Payroll and outsource staff expenses(1,197,219)(824,043)
    Advertising expenses(714,785)(476,785)
    Technology expenses(130,492)(100,977)
    Depreciation and amortization(387,182)(299,726)
    Other operating expenses(306,199)(260,971)
    Other operating income60,95344,060
       
    Operating loss(97,831)(287,500)
       
    Financial income819,093272,288
    Financial expenses(1,343,470)(525,672)
    Monetary gains491,474215,966
       
    Loss before income taxes(130,734)(324,918)
       
    Taxation on income--
       
    Loss for the period(130,734)(324,918)
       
    Basic and diluted income/(loss) per share                    (0.40)                    (1.00)
       
    Other comprehensive loss:
    Items that will not be reclassified to    		  
       profit or loss in subsequent period:  
    Actuarial gains/(losses) arising on remeasurement of  
       post-employment benefits(30)(23,561)
       
    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--
       
    Total comprehensive loss for the period(130,764)(348,479)


    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 31 March 2024 unless otherwise indicated. Unaudited.)

     1 January –1 January –
    31 March
     2024    		31 March
    2023
     (unaudited)(unaudited)
    Loss before income taxes(130,734)(324,918)
    Adjustments to reconcile income before income taxes to cash flows from operating activities:2,029,501 1,647,247
    Interest and commission expenses1,188,599497,067
    Depreciation and amortization387,182299,726
    Interest income on time deposits(145,783)(76,967)
    Interest income on financial investments(657)-
    Interest income on credit sales(284,188)(63,585)
    Provision for unused vacation liability34,061(3,229)
    Provision for personnel bonus138,73157,627
    Provision for legal cases5362,444
    Provision for doubtful receivables30,50312,563
    Provision for impairment of trade goods, net21,20118,791
    Provision for post-employment benefits15,0533,267
    Provision for share based payment25,09438,601
    Fair value gains of financial investments(39,371)(1,518)
    Provision for Turkish Capital Markets Board fee734-
    Net foreign exchange differences(236,928)(110,728)
    Monetary gains on provisions(70,474)(126,906)
    Monetary losses on non-operating activities965,2081,100,094
    Changes in net working capital  
    Change in trade payables and payables to merchants(108,311)(1,394,014)
    Change in inventories(463,305)63,986
    Change in trade receivables(215,143)338,979
    Change in contract liabilities and merchant advances188,629(145,116)
    Change in contract assets(8,226)(6,444)
    Change in other liabilities254,150(80,942)
    Change in other assets and receivables138,983211,315
    Change in due from related parties561(320)
    Change in due to related parties1,35310,784
    Post-employment benefits paid(7,779)(12,664)
    Payments for concluded litigation(4,993)(2,078)
    Payments for personnel bonus(217,344)(202,164)
    Payments for unused vacation liabilities(1,605)(2,193)
    Net cash provided by operating activities1,455,737 101,458
    Investing activities:  
    Purchases of property and equipment and intangible assets(429,051)(362,437)
    Proceeds from sale of property and equipment2,8921,649
    Purchase of financial investments(5,033,121)-
    Proceeds from sale of financial investments2,588,07631,056
    Interest received on credit sales256,88463,585
    Interest income on time deposits and financial investments141,21084,968
    Net cash used in by investing activities(2,473,110)(181,179)
    Financing activities:  
    Proceeds from borrowings249,70327,553
    Repayment of borrowings(121,355)(12,092)
    Interest and commission paid(1,072,612)(470,449)
    Lease payments(76,362)(87,487)
    Net cash used in financing activities(1,020,626)(542,475)
       
    Net decrease in cash and cash equivalents(2,037,999)(622,196)
       
    Cash and cash equivalents at 1 January6,327,538 9,972,250
    Effects of inflation on cash and cash equivalents(757,313)(1,098,328)
    Effects of exchange rate changes on cash and cash equivalents and restricted cash25,109121,678
    Cash and cash equivalents at 31 March3,557,335 8,373,404


    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 (net income) 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 loss for the periods presented.

    Amounts expressed in millions of Turkish lira (TRY) in terms of the purchasing power of the TRY at 31 March 2024. Unaudited.

     Three months ended March 31,
     20242023
    Net loss for the period(130.7)(324.9)
    Taxation on income--
    Financial income819.1272.3
    Financial expenses(1,343.5)(525.7)
    Depreciation and amortization(387.2)(299.7)
    Monetary gains491.5216.0
    EBITDA289.4 12.2

    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 31 March 2024. Unaudited.

     Three months ended March 31,
     20242023
    Revenue11,309.67,800.5
    Cost of inventory sold(7,505.6)(5,426.2)
    Gross Contribution3,804.02,374.3

    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). Unaudited.

     Three months ended March 31,
     20242023
    Revenue11,309.67,800.5
    Reversal of IAS 29 adjustment397.03,267.0
    IAS 29-Unadjusted Revenue10,912.64,533.5

    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). Unaudited.

     Three months ended March 31,
     20242023
    Revenue11,309.67,800.5
    Cost of inventory sold(7,505.6)(5,426.2)
    Gross Contribution3,804.0 2,374.3
    Reversal of IAS 29 adjustment(421.0)822.7
    IAS 29 - Unadjusted Gross Contribution4,225.01,551.6

    The following tables show the reconciliation of IAS 29-Unadjusted EBITDA to net loss for the periods presented.

    Amounts expressed in millions of Turkish lira (TRY). Unaudited.

     Three months ended
     31 March 2024Reversal of IAS 29 Adjustment
    		IAS 29-Unadjusted
    31 March 2024    		31 March 2023 Reversal of IAS 29 AdjustmentIAS 29-Unadjusted
    31 March 2023
    Net income/ (loss) for the period(130.7)(234.1)103.4(324.9)(244.8)(80.1)
    Taxation on income------
    Financial income819.131.6787.5272.3113.5158.8
    Financial expenses(1,343.5)(15.5)(1,328.0)(525.7)(215.2)(310.5)
    Depreciation and amortization(387.2)(195.8)(191.4)(299.7)(195.4)(104.3)
    Monetary gains491.5491.50.0216.0216.00.0
    IAS 29-Unadjusted EBITDA289.4(545.9)835.3 12.2(163.7)175.9

    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 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 31 March 2024. Unaudited.

     Three months ended March 31,
     20242023
    Net cash provided by operating activities1,455.7101.5
    Capital expenditures(429.1)(362.4)
    Proceeds from the sale of property and equipment3.01.6
    Free Cash Flow1,029.6 (259.3)

    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 31 March 2024. Unaudited.

     As of March 31, 2024As of December 31, 2023
    Current assets16,846.416,827.2
    Cash and cash equivalents(3,562.9)(6,328.5)
    Financial investments(4,402.9)(1,982.3)
    Current liabilities(15,787.8)(15,701.7)
    Bank borrowings, current313.5211.1
    Lease liabilities, current128.6177.9
    Net Working Capital(6,465.1)(6,796.3)


    BREAKDOWN OF THE COMPARATIVE FIGURES RESTATED BY INFLATION CONSOLIDATED BALANCE SHEETS
    (Amounts expressed in thousands of Turkish lira (TRY); adjusted figures in terms of the purchasing power of the TRY at 31 March 2024.)

      

    Restatement Method    		Unaudited Unadjusted
    31 March 2024    		IAS 29
    Adjustment    		Unaudited Adjusted
    31 March 2024    		Unaudited Unadjusted
    31 Dec
    2023    		IAS 29
    Adjustment    		Unaudited Adjusted
    31 Dec
    2023
    ASSETS       
    Current assets:       
    Cash and cash equivalents1 3,562,870 -   3,562,870 5,500,000 828,500 6,328,500
    Restricted cash1 102,642 -   102,642 167,312 25,204 192,516
    Financial investments1 4,402,874 -   4,402,874 1,722,744 259,507 1,982,251
    Trade receivables 1 2,962,044 -   2,962,044 2,373,275 357,502 2,730,777
    Due from related parties1 10,004 -   10,004 9,182 1,384 10,566
    Loan receivables1 46,866 -   46,866 -   -   -  
    Inventories2 4,626,765 206,482 4,833,247 3,795,869 766,389 4,562,258
    Contract assets1 34,036 -   34,036 22,431 3,379 25,810
    Other current assets3 825,628 66,204 891,832 828,078 166,432 994,510
    Total current assets     16,573,729 272,686 16,846,415 14,418,891  2,408,297  16,827,188
    Non-current assets:       
    Property and equipment2 288,872 286,723 575,595 256,788 321,686 578,474
    Intangible assets2 1,402,204 818,205 2,220,409 1,220,910 911,893 2,132,803
    Right of use assets2 325,198 304,585 629,783 290,952 359,760 650,712
    Loan receivables1 10,853 -   10,853 799 121 920
    Other non-current assets3 22,440 13,129 35,569 22,706 16,094 38,800
    Total non-current assets  2,049,567  1,422,642  3,472,209  1,792,155  1,609,554  3,401,709
    Total assets  18,623,296  1,695,328  20,318,624  16,211,046  4,017,851  20,228,897
     

    LIABILITIES AND EQUITY    		       
    Current liabilities:       
    Bank borrowings1 313,479 -   313,479 183,472 27,637 211,109
    Lease liabilities1 128,595 -   128,595 154,573 23,285 177,858
    Wallet deposits1 344,816 -   344,816 188,412 28,382 216,794
    Trade payables and payables to merchants1 11,964,643 -   11,964,643 10,562,999 1,591,171 12,154,170
    Due to related parties1 6,690 -   6,690 4,638 699 5,337
    Provisions1 83,413 -   83,413 81,728 12,311 94,039
    Employee benefit obligations1 190,998 -   190,998 289,410 43,596 333,006
    Contract liabilities and merchant advances1 1,836,561 -   1,836,561 1,424,467 214,576 1,639,043
    Other current liabilities3 838,223 80,335 918,558 698,322 172,007 870,329
    Total current liabilities  15,707,418  80,335  15,787,753  13,588,021  2,113,664  15,701,685
    Non-current liabilities:       
    Bank borrowings1 1,151 -   1,151 2,809 423 3,232
    Lease liabilities1 182,454 -   182,454 121,820 18,350 140,170
    Employee benefit obligations1 111,222 -   111,222 104,284 15,708 119,992
    Other non-current liabilities2 330,964 210,451 541,415 231,270 232,250 463,520
    Total non-current liabilities  625,791  210,451  836,242  460,183  266,731  726,914
    Equity:       
    Share capital4 65,200 508,577 573,777 65,200 508,577 573,777
    Treasury shares4 (159,770) (35,657) (195,427) (159,770) 893,575 733,805
    Other capital reserves4 321,592 437,307 758,899 297,799 16,367,289 16,665,088
    Share premiums4 4,260,737 12,404,351 16,665,088 4,260,737 (4,456,164) (195,427)
    Accumulated deficit5 (2,197,672) (11,910,036) (14,107,708) (2,301,124) (11,675,821) (13,976,945)
    Total equity  2,290,087  1,404,542  3,694,629  2,162,842  1,637,456  3,800,298
    Total equity and liabilities   18,623,296  1,695,328 20,318,62416,211,0464,017,85120,228,897


    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 31 March 2024. Unaudited.)

      Three Months Ended
     Restatement MethodUnaudited Unadjusted
    31 March 2024    		IAS 29
    Adjustment    		Unaudited Adjusted
    31 March 2024    		Unaudited Unadjusted
    31 March 2023    		IAS 29
    Adjustment    		Unaudited Adjusted
    31 March 2023
            
    Sale of goods (1P)67,529,770285,8007,815,5703,302,6872,373,7045,676,391
    Marketplace revenue (3P)61,421,47348,9771,470,450647,127470,1151,117,242
    Delivery service revenue61,550,02152,2721,602,293476,113345,825821,938
    Other6411,31710,003421,320107,60977,290184,899
    Revenues 10,912,581 397,052 11,309,633 4,533,536 3,266,934 7,800,470
            
    Operating expenses       
    Cost of inventory sold7(6,687,586)(818,003)(7,505,589)(2,981,920)(2,444,269)(5,426,189)
    Shipping and packaging expenses6(1,188,150)(38,801)(1,226,951)(431,267)(312,072)(743,339)
    Payroll and outsource staff expenses6(1,151,995)(45,224)(1,197,219)(480,039)(344,004)(824,043)
    Advertising expenses6(680,441)(34,344)(714,785)(277,292)(199,493)(476,785)
    Technology expenses9(115,467)(15,025)(130,492)(58,442)(42,535)(100,977)
    Depreciation and amortization8(191,398)(195,784)(387,182)(104,225)(195,501)(299,726)
    Other operating expenses9(291,871)(14,328)(306,199)(150,605)(110,366)(260,971)
    Other operating income938,19822,75560,95321,89322,16744,060
            
    Operating Income/(loss) 643,871 (741,702)(97,831)71,639 (359,139)(287,500)
            
    Financial income6787,51031,583819,093158,780113,508272,288
    Financial expenses6(1,328,008)(15,462)(1,343,470)(310,494)(215,178)(525,672)
    Monetary gains10-491,474491,474-215,966215,966
            
    Income/(Loss) before income taxes 103,373 (234,107)(130,734)(80,075)(244,843)(324,918)
            
    Taxation on income-------
            
    Income/(Loss) for the period 103,373 (234,107)(130,734)(80,075)(244,843)(324,918)


    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 31 March 2024. Unaudited.)

     Unaudited UnauditedUnaudited Unaudited
     Unadjusted AdjustedUnadjusted Adjusted
     1 Jan- 31 March 2024IAS 29 adjustment1 Jan- 31 March 20241 Jan- 31 March 2023IAS 29 adjustment1 Jan- 31 March 2023
    Income/(loss) before income taxes103,373(234,107)(130,734)(80,075)(244,843)(324,918)
    Adjustments to reconcile income/(loss) before income taxes to cash flows from operating activities:887,669 1,141,832 2,029,501 300,830 1,346,417 1,647,247
    Interest and commission expenses1,177,13011,4691,188,599288,340208,727497,067
    Depreciation and amortization191,398195,784387,182104,225195,501299,726
    Interest income on time deposits(141,225)(4,558)(145,783)(44,609)(32,358)(76,967)
    Interest income on credit sales(273,733)(10,455)(284,188)(36,898)(26,687)(63,585)
    Interest income on financial investment(633)(24)(657)---
    Provision for unused vacation liability32,8561,20534,061(1,868)(1,361)(3,229)
    Provision for personnel bonus71,83966,892138,73133,33524,29257,627
    Provision for legal cases517195361,4141,0302,444
    Provision for doubtful receivables29,4251,07830,5037,2675,29612,563
    Provision for impairment of trade goods, net26,477(5,276)21,201(8,603)27,39418,791
    Provision for post-employment benefits14,52153215,0531,8901,3773,267
    Provision for share based payment23,7931,30125,09422,03416,56738,601
    Fair value gains of financial investments(38,454)(917)(39,371)(875)(643)(1,518)
    Provision for Turkish Capital Markets Board fee70925734---
    Net foreign exchange differences(226,951)(9,977)(236,928)(64,822)(45,906)(110,728)
    Monetary gains on provisions-(70,474)(70,474)-(126,906)(126,906)
    Monetary losses on non-operating activities-965,208965,208-1,100,0941,100,094
    Changes in net working capital      
    Change in trade payables and payables to merchants1,480,370(1,588,681)(108,311)(90,242)(1,303,772)(1,394,014)
    Change in inventories(1,048,651)585,346(463,305)(156,688)220,67463,986
    Change in trade receivables(583,280)368,137(215,143)114,588224,391338,979
    Change in contract liabilities and merchant advances403,520(214,891)188,629(6,167)(138,949)(145,116)
    Change in contract assets(11,605)3,379(8,226)(5,746)(698)(6,444)
    Change in other liabilities396,029(141,879)254,15054,058(135,000)(80,942)
    Change in other assets and receivables10,467128,516138,98343,727167,588211,315
    Change in due from related parties(822)1,383561(405)85(320)
    Change in due to related parties2,051(698)1,3537,0983,68610,784
    Post-employment benefits paid(7,504)(275)(7,779)(7,326)(5,338)(12,664)
    Payments for concluded litigation(4,817)(176)(4,993)(1,202)(876)(2,078)
    Payments for personnel bonus(201,552)(15,792)(217,344)(119,982)(82,182)(202,164)
    Payments for unused vacation liabilities(1,555)(50)(1,605)(1,272)(921)(2,193)
    Collections of doubtful receivables---219(219)-
    Net cash provided by operating activities1,423,693 32,044 1,455,737 51,415 50,043 101,458
    Investing activities:      
    Purchases of property and equipment and intangible assets(355,729)(73,322)(429,051)(202,620)(159,817)(362,437)
    Proceeds from sale of property and equipment9071,9852,8924231,2261,649
    Purchase of financial investments(4,907,474)(125,647)(5,033,121)---
    Proceeds from sale of financial investments2,477,905110,1712,588,07618,43112,62531,056
    Interest received on time deposits and financial investments136,5264,684141,21048,58036,38884,968
    Interest received on credit sales247,3949,490256,88436,89826,68763,585
    Net cash used in investing activities(2,400,471)(72,639)(2,473,110)(98,288)(82,891)(181,179)
    Financing activities:      
    Proceeds from borrowings240,8738,830249,70315,93811,61527,553
    Repayment of borrowings(117,063)(4,292)(121,355)(6,995)(5,097)(12,092)
    Interest and commission paid(1,035,951)(36,661)(1,072,612)(272,906)(197,543)(470,449)
    Lease payments(73,662)(2,700)(76,362)(50,607)(36,880)(87,487)
    Net cash used in financing activities(985,803)(34,823)(1,020,626)(314,570)(227,905)(542,475)
    Net decrease in cash and cash equivalents(1,962,581)(75,418)(2,037,999)(361,443)(260,753)(622,196)
    Cash and cash equivalents at 1 January5,499,165 828,373 6,327,538 5,259,801 4,712,449 9,972,250
    Effects of inflation on cash and cash equivalents-(757,313)(757,313)-(1,098,328)(1,098,328)
    Effects of exchange rate changes on cash and cash equivalents and restricted cash20,7514,35825,10971,15850,520121,678
    Cash and cash equivalents at 31 March3,557,335 -3,557,335 4,969,516 3,403,888 8,373,404

    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, game pins and codes, gift vouchers, 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 64 million members with over 248 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 approximately 102 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 approximately 53 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 and partnerships; (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 2023 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 Measures
    This press release includes certain non-IFRS financial measures, including but not limited to, Gross Contribution, IAS 29-Unadjusted Gross Contribution, IAS 29-Unadjusted Revenue, EBITDA, 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 Information
    This press release includes unaudited quarterly financial information as of and for the three months ended March 31, 2024, for the three months ended March 31, 2023 and as of and for the year ended December 31, 2023. The quarterly and yearly financial 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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