HEPS — D-Market Elektronik Hizmetler ve Ticaret A.S.

Hepsiburada (HEPS) Q4 2024 Earnings Call Summary

1. Key Financial Results and Metrics

• Gross Merchandise Volume (GMV): Achieved a real growth of 12.1% in 2024, with unadjusted inflation GMV growth at 74% year-on-year.
• Revenue Growth: Increased by 6.4% in Q4 and 11.1% for the full year.
• EBITDA Margin: Reached 1.1% of GMV for 2024, a 0.7 percentage point improvement year-on-year.
• Active Customers: Grew by 235,000 to 12.2 million.
• Orders: Totaled 131.4 million, reflecting a 16% year-on-year growth.
• Average Order Value: Increased by 4%.
• Free Cash Flow: Decreased by TRY 1.9 billion, with a total of TRY 3.7 billion for the year.

2. Strategic Updates and Business Highlights

• Customer Loyalty Program: Hepsiburada Premium membership grew to 3.7 million members, enhanced through partnerships like Warner Bros. Discovery.
• Logistics Improvement: HepsiJet delivered 72% of total parcels, with over 40 million parcels delivered in 2024.
• FinTech Solutions: Total lending volume reached 16.2 billion lira, a 2.6 times increase from 2023, with significant adoption of buy now pay later (BNPL) options.
• Marketplace Operations: Shift towards 3P operations, which now account for 70% of business, reflecting a strategic focus on non-electronics categories.

3. Forward Guidance and Outlook

• The beginning of 2025 faces challenges due to macroeconomic headwinds and consumer purchasing power pressures, alongside political sensitivities affecting marketing efforts.
• The acquisition of a 65.4% controlling stake by Kaspi is expected to create value and enhance Hepsiburada's fintech capabilities.

4. Bad News, Challenges, or Points of Concern

• Macroeconomic Headwinds: Ongoing challenges affecting consumer purchasing power and a boycott against shopping beginning in March 2025.
• Free Cash Flow Decline: Notable decrease in cash flow due to reduced operating cash and increased capital expenditures.
• Rising Costs: Increases in payroll, shipping, and operational expenses, which may pressure profitability despite margin improvements.

5. Notable Q&A Insights

• There was no Q&A session during the call; however, management expressed eagerness to connect with investors for questions post-call.

This summary encapsulates the key financial metrics, strategic initiatives, outlook, and challenges faced by Hepsiburada as discussed in the Q4 2024 earnings call.