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 second quarter ended June 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 June 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 June 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 June 30, 2023 are as follows:
Date |
Index |
Conversion Factor |
30 June 2023 |
1,351.6 |
1.00 |
31 December 2022 |
1,128.5 |
1.20 |
30 June 2022 |
977.9 |
1.38 |
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.
Second Quarter 2023 Financial and
Operational Highlights(All financial figures are
restated pursuant to IAS 29 unless otherwise
indicated)
- Gross
merchandise value (GMV) increased by 42.9% to TRY 19.0
billion compared to TRY 13.3 billion in Q2 2022.
- IAS 29-Unadjusted
GMV increased by 100.5% to TRY 18.5 billion compared to Q2
2022.
-
Revenue increased by 42.8% to TRY 5,893.6 million
compared to TRY 4,126.0 million in Q2 2022.
- Number of
orders increased by 94.6% to 27.5 million compared to 14.1
million orders in Q2 2022.
- Active
Customers increased to 12.0 million compared to 11.7
million as of June 30, 2022.
- (Order)
Frequency increased by 56.5% to 8.1 compared to 5.2 as of
June 30, 2022.
- Active
Merchant base increased by 14.2% to 101.3 thousand
compared to 88.7 thousand as of June 30, 2022.
- Number of
SKUs increased by 49.5% to 194.7 million compared to 130.3
million as of June 30, 2022.
- Share of
Marketplace GMV was 67.1% compared to 64.0% in Q2
2022.
-
EBITDA improved to positive TRY 154.6 million
compared to negative TRY 820.7 million in Q2 2022. Accordingly,
EBITDA as a percentage of GMV was at 0.8% on a 7.0 percentage
points improvement compared to Q2 2022.
- IAS 29-Unadjusted
EBITDA improved to positive TRY 374.0 million compared to negative
TRY 246.2 million in Q2 2022. IAS 29-Unadjusted EBITDA as a
percentage of GMV in Q2 2023 improved 4.7 percentage points to 2.0%
compared to Q2 2022.
- Net
income for the period was TRY 881.1
million compared to a net loss of TRY 782.7 million for Q2
2022.
-
Free cash flow was negative TRY 607.1 million
compared to positive TRY 276.8 million in Q2 2022.
First Half of 2023 Financial and
Operational Highlights(All financial figures are
restated pursuant to IAS 29 unless otherwise
indicated)
- Gross
merchandise value (GMV) increased by 28.7% to TRY 35.0
billion compared to TRY 27.2 billion in H1 2022.
- IAS 29-Unadjusted
GMV increased by 90.0% to TRY 33.3 billion compared to H1
2022.
-
Revenue increased by 29.1% to TRY 10,821.5 million
compared to TRY 8,381.1 million in H1 2022.
- Number of
orders increased by 77.3% to 51.6 million compared to 29.1
million orders in H1 2022.
- Active
Customers increased to 12.0 million compared to 11.7
million as of June 30, 2022.
- (Order)
Frequency increased by 56.5% to 8.1 compared to 5.2 as of
June 30, 2022.
- Active
Merchant base increased by 14.2% to 101.3 thousand
compared to 88.7 thousand as of June 30, 2022.
- Number of
SKUs increased by 49.5% to 194.7 million compared to 130.3
million as of June 30, 2022.
- Share of
Marketplace GMV was 67.7% compared to 64.8% in H1
2022.
-
EBITDA improved to positive TRY 162.3 million
compared to negative TRY 1,976.8 million in H1 2022. Accordingly,
EBITDA as a percentage of GMV was at 0.5% on a 7.7 percentage
points improvement compared to H1 2022.
- IAS 29-Unadjusted
EBITDA improved to positive TRY 549.8 million compared to negative
TRY 549.0 million in H1 2022. IAS 29-Unadjusted EBITDA as a
percentage of GMV in H1 2023 improved 4.8 percentage points to 1.7%
compared to H1 2022.
- Net
income for the period was TRY 675.8
million compared to a net loss of TRY 2,081.4 million for H1
2022.
-
Free cash flow was negative TRY 770.9 million
compared to negative TRY 2,194.8 million in H1 2022.
Commenting on the results, Nilhan Onal
Gökçetekin, CEO of Hepsiburada said:
“We delivered a strong set of results, exceeding
our financial guidance for the quarter despite the continued
challenging macroeconomic environment. Our customer-centric
approach in execution, compelling value proposition that includes
high quality logistics services and attractive affordability
solutions as well as continued cost optimization efforts have
contributed to this solid performance. Accordingly, in the second
quarter of 2023, we doubled our GMV growth year-on-year and
recorded 2% EBITDA as a percentage of GMV, both unadjusted for
inflation.
“We have continued to expand the benefits of our
loyalty program, Hepsiburada Premium to include further commercial
deals, generating more customer savings. Having marked its first
anniversary in July, the program has attracted 1.3 million members
as at the end of the first week of August. The array of
affordability solutions on our platform, which position us uniquely
among Türkiye’s e-commerce players, contribute to customer
convenience which expedites conversion to sales. Furthermore, our
leading Net Promoter Score in the Turkish e-commerce sector
confirms customer appreciation for these programs and services.
“Meanwhile, we retain a laser focus on our
logistics services and fintech propositions for third parties. This
quarter, HepsiJet has expanded its customer base to almost 1,600
merchants with its distinguished delivery capabilities. Recently,
Hepsipay introduced its “Pay with Hepsipay” solution through
integration with a third-party service provider and aims to
replicate this with many more. With its own debit card, payment
with QR ability, Buy Now Pay Later offering and ability to
facilitate bank loans, Hepsipay is committed to establish itself as
a leading Fintech player in Türkiye.
“The prevailing macroeconomic conditions are
expected to continue to pressure customer purchasing power for some
time yet. Regardless, we maintain a steady footing with full
confidence in our brand and capabilities. Building on our strategic
stance and existing market projections, in the third quarter, we
expect continued GMV growth of around 110% year-on-year compared to
the same quarter of last year, unadjusted for inflation. We also
expect to achieve an EBITDA within the range of 0.5% - 1.0%,
unadjusted for inflation in the third quarter and expect to print
full-year positive EBITDA, unadjusted for inflation. We are
motivated to continue elevating customer experience and fostering
sustainable and profitable growth while preserving prudent capital
management. We thank our shareholders, our customers, our partners,
and our exceptional team for their continued support. Together, we
will boldly navigate the challenges and build a better future for
Hepsiburada and the communities we serve.”
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 June 30, 2023 and June 30, 2022 and the six
months ended June 30, 2023 and June 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 June 30, |
Six months ended June 30, |
unaudited |
|
unaudited |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
GMV (TRY in billion) |
19.0 |
13.3 |
42.9% |
35.0 |
27.2 |
28.7% |
Marketplace GMV (TRY in billion) |
12.7 |
8.5 |
49.8% |
23.7 |
17.6 |
34.5% |
Share of Marketplace GMV (%) |
67.1% |
64.0% |
3.1 pp |
67.7% |
64.8% |
2.9pp |
Number of orders (million) |
27.5 |
14.1 |
94.6% |
51.6 |
29.1 |
77.3% |
Active Customer (million) |
12.0 |
11.7 |
2.7% |
12.0 |
11.7 |
2.7% |
Revenue |
5,893.6 |
4,126.0 |
42.8% |
10,821.5 |
8,381.1 |
29.1% |
Gross contribution |
1,769.3 |
656.6 |
169.5% |
3,269.2 |
1,178.7 |
177.4% |
Gross contribution margin (%) |
9.3% |
5.0% |
4.4pp |
9.3% |
4.3% |
5.0pp |
Net income/(loss) for the period |
881.1 |
(782.7) |
(212.6%) |
675.8 |
(2,081.4) |
(132.5%) |
EBITDA |
154.6 |
(820.7) |
(118.8%) |
162.3 |
(1,976.8) |
(108.2%) |
EBITDA as a percentage of GMV (%) |
0.8% |
(6.2%) |
7.0pp |
0.5% |
(7.3%) |
7.7pp |
Net cash (used
in)/provided by operating activities |
(431.6) |
570.0 |
n.m |
(367.5) |
(1,734.4) |
n.m |
Free Cash Flow |
(607.1) |
276.8 |
n.m |
(770.9) |
(2,194.8) |
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 and 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 August 24, 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.
In Q3 2023, we expect to continue our positive
IAS 29-Unadjusted EBITDA performance and deliver IAS 29-Unadjusted
EBITDA as a percentage of GMV within the range of 0.5% to 1%.
Underpinning this performance, we also expect IAS 29-Unadjusted GMV
growth of around 110% in Q3 2023 compared to Q3 2022.
Looking ahead, we are poised to print full-year
positive IAS 29-Unadjusted EBITDA in 2023. We intend to remain
focused on sustainable and profitable growth with a prudent
approach to capital allocation.
Q2 2023 Business and Strategy Highlights
As at the end of June 2023, the rate of
inflation followed a downward trend mainly due to the high base
effect compared to the corresponding period:
-
The annual inflation rate published by TurkStat as of June 30, 2023
was 38.2%, down from 78.6% as of June 30, 2022 and 50.5% as of
March 31, 2023. The monthly inflation rates during the second
quarter of 2023 were 2%, 0.04% and 4% in April, May and June,
respectively. The Consumer Confidence Index was 85.1 as of June 30,
2023 compared to 80.1 as of March 31, 2023.
In Q2 2023, IAS 29-Unadjusted GMV increased by
100.5% to TRY 18.5 billion compared to Q2 2022. This exceeded our
GMV growth guidance of around 95% by 5.5 percentage points.
-
Adjusted for inflation, GMV increased by 42.9% to TRY 19.0 billion
compared to Q2 2022. This performance was attributable to our value
proposition supported by the appeal to the customers of our
Hepsiburada Premium loyalty program, attractive affordability
solutions and data-driven marketing campaigns.
-
For Hepsiburada, GMV growth is a function of the growth in number
of orders and average order value. We achieved continued order
growth of 95% in Q2 2023 compared to Q2 2022. Order growth came
through the continued rise in order frequency and customer growth.
Our Active Customer base increased by 2.7% to 12.0 million as of
June 30, 2023 and order frequency (LTM) grew by 56.5% to 8.1, up
from 5.2 as of June 30, 2022. A strong customer demand for our
digital products (which mainly include sweepstakes and gamified
lotteries as well as the first monthly payment of Hepsiburada
Premium membership subscription) contributed to the rise in order
frequency. Excluding the orders of digital products, order
frequency would have been 5.9 as of June 30, 2023 compared to 5.0
as of June 30, 2022, corresponding to 17.3% growth. Accordingly,
order growth excluding that of digital products was 20.5% in Q2
2023 compared to Q2 2022. While these digital products generated
nearly 1% of our GMV in Q2 2023, we value the repeat interaction
they enable with the participating customer segments.
The discussion below elaborates on our progress
in Q2 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, discounted services, among others.
The monthly subscription fee as at the end of June 30, 2023
remained at TRY 14.9. This quarter, we further enriched the
program’s offering by including summer special deals and exclusive
campaigns.
-
Based on the results of market research conducted by FutureBright
(a local research company), Hepsiburada Premium members’ Net
Promoter Score (“NPS”) was 83 in June 2023, which is 10 points
above the Company’s overall NPS. This indicates a strong
satisfaction level from program members.
-
As of the end of Q2 2023, we had a total of 1.2 million Hepsiburada
Premium members (with approximately 500 thousand additional members
joining in the six months period) and by August 7, 2023, the number
of members reached 1.3 million.
- Hepsiburada
Premium members have continued to generate higher order frequency
compared to non-members. Data for the second quarter of 2023
indicated that Premium members’ monthly order frequency was 1.4
times the frequency they had generated before joining the
program.
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 leveraging our sustainable differentiators by
providing our customers with best value through our affordability
solutions (through Hepsipay) and superior delivery services
(through HepsiJet). Our solutions set us apart from the competition
by demonstrating our commitment to customer satisfaction.
-
In Q2 2023, we had an overall NPS of 73 compared to 75 in Q1 2023
(according to the results of the market research conducted by
FutureBright on behalf of Hepsiburada). Our high NPS evidences our
leading position in the Turkish e-commerce market. 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 12.5 million Hepsipay wallet customers (representing
users who have opened their wallet account by giving the required
consent to Hepsipay) as of June 30, 2023. In Q2 2023, customers
with a Hepsipay wallet generated 86% of GMV compared to 78% in Q2
2022, confirming strong performance in migrating Hepsiburada
customers to Hepsipay.
-
We remain the only e-retailer with licenses in payments and
consumer finance as well as first in market to launch a
“Buy-Now-Pay-Later” (“BNPL”) solution. Our BNPL solution had been
used by over 207 thousand customers as of June 30, 2023. In Q2
2023, around 159 thousand orders were processed through our
non-card affordability solutions (including BNPL and shopping
loans), corresponding to a 5.0% share of total GMV for the quarter,
compared to 3.2% in Q2 2022. Around 51% of this GMV in Q2 2023 came
through shopping loans provided by banks. We diligently manage
credit risk, while maintaining our focus on growth
optimization.
- In May
2023, Hepsipay launched the Hepsipay debit card available through
the Hepsipay wallet. Through the Hepsiburada mobile app, any
consumer who completes the required authentication steps can be
issued a debit card upon request. The Hepsipay debit card is also
linked to the QR payment feature allowing customers to use their
Hepsipay debit card at any off-line retailer which accepts QR
payments (and we expect to be able to extend this to include any
other credit card that customers carry in their Hepsipay wallet).
Additionally, Hepsipay debit card holders are able to top up their
e-wallets by way of consumer loans (from three leading banks in
Türkiye) in addition to making money transfers from their bank
accounts. This capability adheres to our “always full wallet”
motto.
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 Q2 2023,
HepsiJet delivered 83% of orders placed through our retail arm (1P)
within the next day (compared to 84% in Q2 2022).
-
HepsiJet is also a key component of our value proposition for our
merchants. In Q2 2023, HepsiJet increased its coverage within our
merchant base, delivering around 66% of our total parcels, up from
60% in Q2 2022.
-
In Q2 2023, HepsiJet had an NPS of 88.9 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 handled delivery of 59% of
oversized parcels ordered through our platform in Q2 2023, up from
51% in Q2 2022.
c) Pursuing profitability by focusing on core
operations, growth in non-electronics and step change in opex
-
Continuing the trend from the first quarter, we delivered a
positive IAS 29-Unadjusted EBITDA of TRY 374.0 million in Q2 2023.
This was achieved mainly through a stronger Gross Contribution,
optimized advertising spending and prudent operational expenses
strategy. EBITDA was also positive at TRY 154.6 million in Q2 2023
compared to negative TRY 820.7 million in Q2 2022.
-
We continued to invest in our in-house merchant application,
Hepsiburada My Business Partner, which, among other capabilities,
facilitates proactive campaign 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.
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 the services to other retailers benefits both
retail partners and customers. We see great potential for Hepsipay
and HepsiJet to leverage their assets and increase their revenue
contribution to our Company.
-
HepsiJet today serves nearly 1,600 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
surged to 24.8% in the second quarter of 2023, up from 22.1% in Q1
2023. Total parcel volume delivered of third parties in Q2 2023
showed a solid increase by 26.3% compared to Q1 2023.
-
In July 2023, Hepsipay introduced its one-click check-out (Pay with
Hepsipay) service on another platform. The envisaged growth in
one-click check-out integrations will become instrumental in
Hepsipay’s off-platform expansion.
-
Hepsipay's solid 12.5 million wallet base, diverse affordability
solutions, own loyalty program (Hepsipara Program) and fast and
reliable check-out attribute to its competitive advantage. Hepsipay
targets the consumer loan market which had a total size, as August
11, 2023, of $33 billion (source: Banking Regulation and
Supervision Agency) and the card payments market for domestic cards
with a size of $173 billion in 2022 (source: the Interbank Card
Center) each in Türkiye.
-
Following the second quarter of 2023, Hepsipay has taken strategic
steps towards solidifying its position in the Fintech arena,
including:
-
in July 2023, entering into a five-year strategic partnership with
Visa Inc. in relation to Hepsipay’s card scheme.
-
on August 23, 2023, making a $1 million investment in one of the
leading payment gateway service providers in Türkiye, Craftgate
Technology (“Craftgate”). Craftgate helps e-commerce companies
easily integrate and manage the virtual point of sale of all banks
and e-money institutions from a single platform. Our investment in
Craftgate is aligned with our vision of leading the financial
technologies market in Türkiye and we believe that it will further
foster the growth of our e-commerce partners.
ESG Actions
-
On May 23, 2023, Hepsiburada published its first Sustainability
Report for the year 2022 (the “Report”). Certified by the Global
Reporting Initiative, the Report is also a first for Türkiye’s
e-commerce sector. The Report presents Hepsiburada’s sustainability
approach within four key focus areas: (i) an equal and inclusive
corporate culture; (ii) social benefit projects; (iii) ethical and
transparent governance; and (iv) environmentally responsible
solutions. Notably, the Report highlights that:
-
Hepsiburada is a member of the United Nations (UN) Global Compact
and is committed to the Ten Principles of the UN Global Compact
related to human rights, labor, the environment and
anti-corruption, and supports the Sustainable Development
Goals.
-
To ensure an equal workplace, Hepsiburada signed the UN Women’s
Empowerment Principles in 2022, committing to seven principles to
develop company policies for gender equality in the workplace and
women’s empowerment.
-
Hepsiburada increased the female employee ratio from 41% in 2020 to
46% in 2022, and the female executive ratio (manager and above)
from 31% in 2020 to 34% in 2022.
-
As part of the HepsiTürkiye’den (All from Türkiye) program,
Hepsiburada has continued to support local produce by backing over
330 local producers.
-
As part of the “Renew the Old” project, Hepsiburada recycles used
electronic devices, optimizes the use of materials through
responsible packaging practices, and reduces its environmental
impact through more efficient and innovative activities to manage
resources.
-
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 2,057 women in Q2 2023. To
date, the program has supported around 45.4 thousand women
entrepreneurs. Furthermore, the number of women’s cooperatives on
our platform has reached 213 as of June 30, 2023.
-
Since the earthquakes that hit the southeastern region of Türkiye
in February 2023, as part of the TEWE program, various NGO
collaborations have been established to provide sustainable support
to the impacted region. As of June 30, 2023, the number of active
women entrepreneurs and women's cooperatives in the earthquake zone
has reached 1,795 and 24, respectively.
Subsequent Events
E-Commerce Regulation Challenge
On July 13, 2023, the Constitutional Court
rejected the lawsuit filed by the Turkish opposition party before
the Court in September 2022 regarding the cancellation of certain
provisions of the E-Commerce Law. As such, the E-Commerce Law
remains in effect. In addition, an e-commerce market player has
filed a lawsuit against the Ministry of Trade, before the Council
of State, requesting annulment of certain provisions of the
E-Commerce Regulation. On May 8, 2023, the Council of State ruled
to suspend execution of certain provisions of the E-Commerce
Regulation. As of the date of this press release, the case
regarding the E-Commerce Regulation remains
pending.
Class Action Proceedings
As disclosed in greater detail in our annual
report on Form 20-F for the fiscal year ended
December 31, 2022 filed on May 1, 2023 (the “2022 Annual
Report”), in September 2021, a class action lawsuit was filed
before the Supreme Court of the State of New York (and in October
2021, a second class action was filed before the United States
District Court Southern District of New York) against, among
others, the Company, its board members and management at the time
of the Company’s IPO and TurkCommerce B.V., alleging that the
Company’s prospectus and the registration statement filed with the
U.S. Securities and Exchange Commission in connection with the IPO,
contained untrue statements of material facts or omitted facts
necessary to make the statements made therein not misleading. In
December, 2022, the parties entered into a settlement agreement
according to which Hepsiburada agreed to pay $13.9 million to
resolve the actions in their entirety, without any admission of
wrongdoing (the “Settlement”). TurkCommerce B.V., currently a
holder of the Company’s Class B ordinary shares, is expected to
contribute $3,975,000 towards the Settlement amount.
In May 2023, following preliminary approval of
the Settlement by the United States District Court Southern
District of New York, the Company paid $13.9 million (corresponding
to approximately TRY 282.6 million) into an escrow account in
accordance with the terms of the Settlement Agreement. The escrow
account is deemed to be in the custody and jurisdiction of the
court. On August 1, 2023, following a settlement fairness hearing,
the United States District Court Southern District of New York gave
its order and final judgment approving the Settlement as fair,
reasonable and adequate. The Settlement remains subject to a final
approval and/or entry of judgment by the Supreme Court of the State
of New York, County of New York, Commercial Division. There can be
no assurance that the Settlement will be approved by the court.
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 June 30, 2023 (in accordance with IAS 29)
unless otherwise indicated.
(in TRY million unless otherwise
indicated) |
Three months ended June 30, |
Six months ended June 30, |
unaudited |
|
unaudited |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
GMV (TRY in billion) |
19.0 |
13.3 |
42.9% |
35.0 |
27.2 |
28.7% |
Marketplace
GMV (TRY in billion) |
12.7 |
8.5 |
49.8% |
23.7 |
17.6 |
34.5% |
Share of
Marketplace GMV (%) |
67.1% |
64.0% |
3.1pp |
67.7% |
64.8% |
2.9pp |
Revenue |
5,893.6 |
4,126.0 |
42.8% |
10,821.5 |
8,381.1 |
29.1% |
Gross
contribution |
1,769.3 |
656.6 |
169.5% |
3,269.2 |
1,178.7 |
177.4% |
Gross
contribution margin (%) |
9.3% |
5.0% |
4.4pp |
9.3% |
4.3% |
5.0pp |
Net
income/(loss) for the period |
881.1 |
(782.7) |
(212.6%) |
675.8 |
(2,081.4) |
(132.5%) |
EBITDA |
154.6 |
(820.7) |
(118.8%) |
162.3 |
(1,976.8) |
(108.2%) |
EBITDA as a
percentage of GMV (%) |
0.8% |
(6.2%) |
7.0pp |
0.5% |
(7.3%) |
7.7pp |
Net cash
provided by/(used in) operating activities |
(431.6) |
570.0 |
n.m |
(367.5) |
(1,734.4) |
n.m |
Free Cash Flow |
(607.1) |
276.8 |
n.m |
(770.9) |
(2,194.8) |
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 June 30, |
Six months ended June 30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
Sale of goods1 (1P) |
4,388.6 |
3,322.6 |
32.1% |
7,974.6 |
6,747.3 |
18.2% |
Marketplace revenue2 (3P) |
781.5 |
419.1 |
86.5% |
1,487.3 |
829.4 |
79.3% |
Delivery service revenue |
540.3 |
324.6 |
66.5% |
1,059.6 |
700.2 |
51.3% |
Other |
183.2 |
59.7 |
206.9% |
300.0 |
104.2 |
187.9% |
Revenue |
5,893.6 |
4,126.0 |
42.8% |
10,821.5 |
8,381.1 |
29.1% |
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 42.8% to TRY 5,893.6
million in Q2 2023 compared to TRY 4,126.0 million in Q2 2022. This
was mainly due to a 32.1% increase in sale of goods (1P) revenue
(comprising 74.5% of total revenue) and a 86.5% increase in
Marketplace revenue (3P) (comprising 13.3% of total revenue),
compared to Q2 2022. Our delivery service revenue, comprising 9.2%
of total revenue, rose 66.5% compared to Q2 2022. Meanwhile, other
revenue which mainly consists of HepsiAd (our advertising
platform), HepsiLojistik (our fulfillment services provider), and
Hepsiburada Premium subscription revenue streams tripled compared
to Q2 2022.
While GMV increased by 42.9% in Q2 2023 compared
to Q2 2022, the 1P and 3P revenue growth during this period was
38.2%. The difference in growth rates was mainly due to a 3.1
percentage point (pp) shift in GMV mix towards 3P, which was
partially compensated by lower customer discounts in our 3P
operations during Q2 2023 compared to Q2 2022 and a change in the
3P GMV generation among categories. The slight increase in returns
and cancellations ratios in Q2 2023 compared to Q2 2022 was another
factor.
The 66.5% increase in delivery service revenue
compared to Q2 2022 was mainly due to i) annual rises in unit
delivery service charges, ii) an increase in delivery service
revenue from off-platform customers of Hepsijet, iii) an increase
in the number of parcels delivered and iv) the 3.1pp shift in the
GMV mix towards 3P (where we generate higher delivery service
revenue compared to our 1P operations).
Gross Contribution
(in TRY million unless indicated otherwise,
unaudited) |
Three months ended June 30, |
Six months ended June 30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
Revenue |
5,893.6 |
4,126.0 |
42.8% |
10,821.5 |
8,381.1 |
29.1% |
Cost of inventory sold |
(4,124.3) |
(3,469.4) |
18.9% |
(7,552.3) |
(7,202.4) |
4.9% |
Gross Contribution |
1,769.3 |
656.6 |
169.5% |
3,269.2 |
1,178.7 |
177.4% |
Gross contribution margin (% of GMV) |
9.3% |
5.0% |
4.4pp |
9.3% |
4.3% |
5.0pp |
Gross contribution margin improved by 4.4pp to
9.3% in Q2 2023 compared to 5.0% in Q2 2022. This was mainly
attributable to a 2.5pp rise in 1P margin mainly due to (i) the
lower quarterly inflation impact on cost of inventory sold
(quarterly inflation for Q2 2023 was 6.3% compared to 15.2% for Q2
2022), (ii) better inventory management resulting in lower
inventory turnover days and (iii) the change in the 1P GMV category
mix; and a 1.0pp increase in 3P margin due to the change in the 3P
GMV category mix.
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% |
- |
- |
- |
- |
- |
- |
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 six months ended June 30, 2023 and 2022 in
absolute terms and as a percentage of GMV:
(in TRY million unless indicated otherwise,
unaudited) |
Three months ended June 30, |
Six months ended June 30, |
2023 |
2022 |
y/y% |
2023 |
2022 |
y/y% |
Cost of inventory sold |
(4,124.3) |
(3,469.4) |
18.9% |
(7,552.3) |
(7,202.4) |
4.9% |
% of GMV |
(21.8%) |
(26.2%) |
4.4pp |
(21.6%) |
(26.4%) |
4.9pp |
Shipping and packaging expenses |
(515.0) |
(383.6) |
34.3% |
(984.6) |
(882.4) |
11.6% |
% of GMV |
(2.7%) |
(2.9%) |
0.2pp |
(2.8%) |
(3.2%) |
0.4pp |
Payroll and outsource staff expenses |
(605.9) |
(449.5) |
34.8% |
(1,126.5) |
(921.2) |
22.3% |
% of GMV |
(3.2%) |
(3.4%) |
0.2pp |
(3.2%) |
(3.4%) |
0.2pp |
Advertising expenses |
(377.9) |
(479.4) |
(21.2%) |
(679.1) |
(1,027.1) |
(33.9%) |
% of GMV |
(2.0%) |
(3.6%) |
1.6pp |
(1.9%) |
(3.8%) |
1.8pp |
Technology expenses |
(68.0) |
(51.7) |
31.5% |
(131.8) |
(103.2) |
27.7% |
% of GMV |
(0.4%) |
(0.4%) |
0.0pp |
(0.4%) |
(0.4%) |
0.0pp |
Depreciation and amortization |
(204.9) |
(140.5) |
45.8% |
(394.3) |
(272.3) |
44.8% |
% of GMV |
(1.1%) |
(1.1%) |
0.0pp |
(1.1%) |
(1.0%) |
(0.1pp) |
Other operating expenses, net |
(47.9) |
(113.1) |
(57.6%) |
(184.9) |
(221.5) |
(16.5%) |
% of GMV |
(0.3%) |
(0.9%) |
0.6pp |
(0.5%) |
(0.8%) |
0.3pp |
Net operating expenses |
(5,943.9) |
(5,087.2) |
16.8% |
(11,053.5) |
(10,630.1) |
4.0% |
Net operating expenses as a % of GMV |
(31.4%) |
(38.4%) |
7.0pp |
(31.5%) |
(39.0%) |
7.5pp |
|
|
|
|
|
|
|
Net operating expenses increased by 16.8% to TRY
5,943.9 million in Q2 2023 compared to TRY 5,087.2 million in Q2
2022. As a percentage of GMV, our net operating expenses declined
7.0pp mainly due to a 4.4pp decrease in cost of inventory sold, a
1.6pp decrease in advertising expenses, a 0.2pp decrease in
shipping and packaging expenses, a 0.2pp decrease in payroll and
outsource staff expenses and a 0.6pp decrease in other operating
expenses, net as a percentage of GMV.
The 4.4pp decrease in cost of inventory sold was
mainly due to a 3.1pp shift in GMV mix towards 3P and lower
quarterly inflation impact on cost of inventory sold.
The 1.6pp decline in advertising expenses as a
percentage of GMV resulted from our continued efficiency efforts 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 facilitated repeat purchases.
In addition, our co-marketing deals with several leading brands
have proven to be mutually beneficial.
The 0.6pp decline in other operating expenses,
net was mainly due to the reversal of TRY 92 million of the TRY
95.6 million provision expense recorded for the investigation in
the Company’s consolidated financial statements as of December 31,
2022. As disclosed in greater detail in our 2022 Annual Report, the
Competition Board (the executive board of the Turkish Competition
Authority) initiated an investigation in August 2021 into 11
companies, including Hepsiburada, regarding potential violations of
the Law on the Protection of Competition. On July 31, 2023, the
investigation was concluded, with the Competition Board imposing an
administrative fine in the amount of TRY 3.6 million (with a 25%
discount on early payment) on Hepsiburada. Accordingly, the
difference between the expense provision recorded for the
investigation and the administrative fine imposed (i.e. TRY 92
million), is reversed and recognized as other operating income in
consolidated statements of comprehensive loss in Q2 2023.
Additionally, we recognized a refund of TRY 13 million resulting
from the restructuring of the fine paid by the Company on November
11, 2022 with respect to the on-site inspection conducted by the
Competition Board as part of the investigation. These reversals,
totaling TRY 105 million, resulted in a 0.5pp improvement in net
operating expenses as a percentage of GMV in Q2 2023.
Financial Income
(in TRY million, unaudited) |
Three months ended June 30, |
Six months ended June 30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y % |
Foreign currency exchange gains |
1,134.3 |
621.6 |
82.5% |
1,203.2 |
1,300.5 |
(7.5%) |
Interest income on time deposits |
85.3 |
62.1 |
37.4% |
77.8 |
81.5 |
(4.5%) |
Interest income on financial instruments |
- |
- |
- |
56.1 |
- |
n.m |
Interest income on credit sales |
52.0 |
31.7 |
64.0% |
92.1 |
56.3 |
63.6% |
Fair value gains on financial assets measured at fair value |
143.1 |
- |
n.m |
144.0 |
23.5 |
n.m |
Other |
28.5 |
0.7 |
n.m |
42.0 |
1.3 |
n.m |
Financial income |
1,443.2 |
716.1 |
101.5% |
1,615.2 |
1,463.1 |
10.4% |
Our financial income increased by 101.5%, or TRY
727.1 million, to TRY 1,443.2 million in Q2 2023 compared to TRY
716.1 million in Q2 2022. This was mainly driven by a TRY 512.7
million increase in foreign currency exchange gains from our U.S.
dollar denominated bank deposits due to increased U.S. dollar / TRY
rates during Q2 2023 compared to Q2 2022. The TRY currency
depreciation was by 34.7% in Q2 2023 compared to 13.9% in Q2 2022.
The increase in financial income was also due to an increase in
fair value gains on financial investments.
Financial Expenses
(in TRY million, unaudited) |
Three months ended June 30, |
Six months ended June 30, |
2023 |
2022 |
y/y % |
2023 |
2022 |
y/y% |
Commission expenses due to early collection of credit card
receivables |
(254.6) |
(202.5) |
25.7% |
(457.5) |
(414.6) |
10.3% |
Foreign currency exchange losses |
(344.3) |
(194.3) |
77.2% |
(399.6) |
(391.4) |
2.1% |
Interest expenses on bank borrowings and lease liabilities |
(29.4) |
(37.2) |
(21.0%) |
(68.4) |
(78.0) |
(12.3%) |
Interest expenses on purchases |
(83.4) |
(44.5) |
87.4% |
(117.8) |
(115.6) |
1.9% |
Fair value losses on financial assets measured at fair value |
- |
(92.3) |
(100.0%) |
- |
(92.3) |
(100.0%) |
Other |
(3.1) |
(0.3) |
933.3% |
(3.6) |
(0.7) |
337.5% |
Financial expenses |
(714.8) |
(571.1) |
25.2% |
(1,046.9) |
(1,092.6) |
(4.2%) |
Our financial expenses increased by 25.2%, or
TRY 143.7 million, to TRY 714.8 million in Q2 2023 compared to TRY
571.1 million in Q2 2022, primarily attributable to a TRY 150.0
million increase in foreign currency exchange losses from our U.S.
dollar denominated trade payables as a result of increased U.S.
dollar/TRY rates during Q2 2023 compared to Q2 2022.
Net Income (Loss) for the
Period
Net income for the period was TRY 881.1 million
in Q2 2023 up from a net loss of TRY 782.7 million in Q2 2022. This
TRY 1,663.8 million improvement resulted from the TRY 975.3 million
improvement in EBITDA, the TRY 583.4 million increase in net
financial income (net of financial expense) and TRY 169.5 million
monetary gain in Q2 2023 against TRY 64.5 million increase in
depreciation and amortization.
EBITDA
EBITDA was TRY 154.6 million in Q2 2023 compared
to negative TRY 820.7 million in Q2 2022, corresponding to 0.8%
EBITDA as a percentage of GMV in Q2 2023. This corresponded to a
7.0pp improvement in EBITDA as a percentage of GMV in Q2 2023
compared to Q2 2022. This strong improvement was driven by a 4.4pp
rise in gross contribution margin, a 1.6pp decline in advertising
expenses, a 0.2pp decline in shipping and packaging expenses, a
0.2pp decline in payroll and outsource staff expenses and a 0.6pp
decline in other operating expenses, net as a percentage of
GMV.
Net Working Capital
Net working capital was negative TRY 3,708.7
million as of June 30, 2023 compared to negative TRY 5,366.8
million as of December 31, 2022. The TRY 1,657.9 million change in
negative net working capital was mainly driven by a TRY 690.6
million decrease in trade payables and payables to merchants, a TRY
497.0 million increase in inventories and a TRY 405.9 million
decrease in provisions. The increase in inventories was mainly due
to planned procurements in Q2 2023 in line with our strategy. The
decrease in trade payables and payables to merchants was mainly due
to payments in Q2 2023 as a result of higher inventory procurements
(with shorter payment terms for some). The decrease in provisions
recognized was mainly due to the reversal of provisions relating to
the previously disclosed investigation by the Competition Board and
the release of a provision relating to the Settlement.
Cash Flow from Operating Activities
Our net cash used in operating activities in Q2
2023 comprised a TRY 881.1 million net income (Q2 2022: net loss of
TRY 782.7 million), a negative TRY 906.3 million change in net
working capital (Q2 2022: positive TRY 613.3 million) and a
negative TRY 406.4 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) (Q2 2022: TRY 739.4
million).
Net cash provided by operating activities
decreased by TRY 1,001.6 million to negative TRY 431.6 million in
Q2 2023 compared to net cash used by operating activities in Q2
2022 of (positive) TRY 570.0 million. Excluding the impact of the
payment of $13.9 million (corresponding to approximately TRY 282.6
million) made by the Company to the escrow account in relation to
the Settlement, the decrease net cash provided by operating
activities by TRY 1,001.6 million would have been TRY 719.0
million.
Free Cash Flow
Our free cash flow was a negative TRY 607.1
million in Q2 2023 from positive TRY 276.8 million in Q2 2022.
Despite the TRY 117.7 million decrease in capex, the TRY 883.9
million decrease in free cash flow was due to a TRY 1,001.6 million
decline in cash flow generated from operating activities.
Total Cash and Financial
Investments
Total cash and cash equivalents was at TRY
4,867.6 million as of June 30, 2023 compared to TRY 6,307.3 million
as of December 31, 2022. The TRY 1,439.7 million decrease was
mainly due to the change in net working capital offsetting the
appreciation of USD/TRY rate against the six-month inflation.
Total financial investments as of June 30, 2023
amounts to TRY 524.3 million. Our financial investments consist of
a financial asset measured at fair value through profit or loss and
foreign currency linked TRY time deposits.
We held around 91% of our total cash, cash
equivalents and financial investments in U.S. dollar as of June 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 79.5 million
as of June 30, 2023, from TRY 15.6 million as of December 31, 2022.
As of June 30, 2023, supplier and merchant financing loans
corresponded to TRY 3.6 million of the short-term bank borrowings
compared to TRY 1.0 million as of December 31, 2022. Our long-term
borrowings decreased from TRY13.1 million as of December 31, 2023
to TRY 5.9 million as of June 30, 2023.
All of our bank borrowings are denominated in
Turkish Lira. As of June 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, Thursday, August 24, 2023 at
16.00 Istanbul time / 14.00 London / 9.00 a.m. New York time.
The live webcast can be accessed via
https://87399.themediaframe.eu/links/hepsiburada230824.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 August 24,
2023.
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 30 June 2023 unless otherwise
indicated.) |
|
|
|
|
30 June 2023(unaudited) |
31 December 2022(audited) |
|
|
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
4,867,634 |
6,307,310 |
Restricted cash |
92,718 |
128,670 |
Financial investments |
524,344 |
21,028 |
Trade receivables |
601,881 |
795,564 |
Due from related parties |
9,748 |
2,057 |
Loan receivables |
1,905 |
4,209 |
Inventories |
2,638,902 |
2,141,856 |
Contract assets |
54,585 |
18,383 |
Other current assets |
640,523 |
615,772 |
|
|
|
Total current assets |
9,432,240 |
10,034,849 |
|
|
|
Non-current assets: |
|
|
Property and equipment |
372,342 |
404,825 |
Intangible assets |
1,192,322 |
1,013,065 |
Right of use assets |
435,686 |
525,260 |
Loan receivables |
1,510 |
4,620 |
Other non-current assets |
26,547 |
75,479 |
|
|
|
Total non-current assets |
2,028,407 |
2,023,249 |
|
|
|
Total assets |
11,460,647 |
12,058,098 |
LIABILITIES AND EQUITY |
|
|
Current liabilities: |
|
|
Bank borrowings |
79,546 |
15,629 |
Lease liabilities |
140,863 |
188,541 |
Wallet deposits |
101,822 |
135,936 |
Trade payables and payables to merchants |
6,359,902 |
7,050,544 |
Due to related parties |
4,555 |
6,682 |
Provisions |
67,188 |
473,138 |
Employee benefit obligations |
130,293 |
186,930 |
Contract liabilities and merchant advances |
812,442 |
764,824 |
Other current liabilities |
272,789 |
455,177 |
|
|
|
Total current liabilities |
7,969,400 |
9,277,401 |
|
|
|
Non-current assets: |
|
|
Bank borrowings |
5,890 |
13,084 |
Lease liabilities |
90,049 |
125,707 |
Employee benefit obligations |
77,289 |
19,711 |
Other non-current liabilities |
208,224 |
175,585 |
|
|
|
Total non-current liabilities |
381,452 |
334,087 |
Equity: |
|
|
Share capital |
362,478 |
362,478 |
Other capital reserves |
422,711 |
386,231 |
Share premiums |
10,528,012 |
10,528,012 |
Accumulated deficit |
(8,203,406) |
(8,830,111) |
|
|
|
Total equity |
3,109,795 |
2,446,610 |
|
|
|
Total equity and liabilities |
11,460,647 |
12,058,098 |
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 June 2023 unless otherwise
indicated. Unaudited.) |
|
Six Months Ended |
Three Months Ended |
|
30 June 2023 |
30 June 2022 |
30 June 2023 |
30 June 2022 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Revenues |
10,821,476 |
8,381,086 |
5,893,603 |
4,126,012 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Cost of inventory sold |
(7,552,262) |
(7,202,421) |
(4,124,318) |
(3,469,411) |
Shipping and packaging expenses |
(984,604) |
(882,364) |
(515,007) |
(383,557) |
Payroll and outsource staff expenses |
(1,126,475) |
(921,237) |
(605,894) |
(449,497) |
Advertising expenses |
(679,075) |
(1,027,115) |
(377,871) |
(479,397) |
Technology expenses |
(131,778) |
(103,212) |
(67,987) |
(51,746) |
Depreciation and amortization |
(394,297) |
(272,338) |
(204,948) |
(140,479) |
Other operating expenses |
(355,196) |
(268,075) |
(190,330) |
(136,763) |
Other operating income |
170,250 |
46,561 |
142,415 |
23,642 |
|
|
|
|
|
Operating loss |
(231,961) |
(2,249,115) |
(50,337) |
(961,196) |
|
|
|
|
|
Financial income |
1,615,174 |
1,463,118 |
1,443,158 |
716,094 |
Financial expenses |
(1,046,856) |
(1,092,560) |
(714,767) |
(571,081) |
Monetary gains/ (losses) |
339,473 |
(202,800) |
203,039 |
33,503 |
|
|
|
|
|
Income/(loss) before income taxes |
675,830 |
(2,081,357) |
881,093 |
(782,680) |
|
|
|
|
|
Taxation on income |
- |
- |
- |
- |
|
|
|
|
|
Income/(loss) for the period |
675,830 |
(2,081,357) |
881,093 |
(782,680) |
|
|
|
|
|
Basic and diluted loss per share |
2.07 |
(6.38) |
2.70 |
(2.40) |
|
|
|
|
|
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 |
(49,125) |
(6,677) |
(34,241) |
(3,162) |
|
|
|
|
|
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 |
- |
(55,751) |
- |
(55,751) |
|
|
|
|
|
Total comprehensive income/(loss) for the
period |
626,705 |
(2,143,785) |
846,852 |
(841,593) |
|
|
|
|
|
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 June 2023 unless otherwise
indicated. Unaudited.) |
|
1 January – |
1 January – |
30 June 2023 |
30 June 2022 |
|
(unaudited) |
(unaudited) |
Income/(loss) before income taxes |
675,830 |
(2,081,357) |
Adjustments to reconcile income/(loss) before income taxes
to cash flows from operating activities: |
634,205 |
2,221,436 |
Interest and commission expenses |
643,724 |
608,146 |
Depreciation and amortization |
394,297 |
272,338 |
Interest income on time deposits and financial instruments |
(133,916) |
(81,524) |
Interest income on credit sales |
(92,136) |
(56,265) |
Provision for unused vacation liability |
21,560 |
16,177 |
Provision for personnel bonus |
80,573 |
48,488 |
Provision for legal cases |
7,200 |
632 |
Provision for doubtful receivables |
14,859 |
13,016 |
Provision for impairment of trade goods, net |
45,622 |
14,120 |
Provision for post-employment benefits |
23,052 |
2,165 |
Provision for share based payment |
36,480 |
89,654 |
Adjustment for impairment loss of financial investments |
(144,048) |
68,712 |
Reversal of provision for the Competition Board penalty |
(92,018) |
- |
Provision for Settlement of Legal Proceedings |
12,263 |
- |
Provision for Turkish Capital Markets Board fee |
19,938 |
- |
Non-cash charges |
- |
(1,411) |
Net foreign exchange differences |
(1,148,164) |
(1,058,242) |
Change in provisions due to inflation |
(107,124) |
(120,856) |
Monetary effect on non-operating activities |
1,052,043 |
2,406,286 |
Changes in net working capital |
|
|
Change in trade payables and payables to merchants |
(690,642) |
(2,169,967) |
Change in inventories |
(542,668) |
352,514 |
Change in trade receivables |
185,614 |
169,069 |
Change in contract liabilities and merchant advances |
47,618 |
(27,492) |
Change in contract assets |
(36,202) |
1,520 |
Change in other liabilities |
(270,635) |
(154,145) |
Change in other assets and receivables |
65,546 |
63,505 |
Change in due from related parties |
(7,691) |
2,217 |
Change in due to related parties |
(2,127) |
(17,116) |
Post-employment benefits paid |
(10,472) |
(2,083) |
Payments for concluded litigation |
(284,923) |
(1,627) |
Payments for personnel bonus |
(127,715) |
(89,599) |
Payments for unused vacation liabilities |
(2,363) |
(1,262) |
Collections of doubtful receivables |
(894) |
- |
Net cash used in operating activities |
(367,519) |
(1,734,387) |
Investing activities: |
|
|
Purchases of property and equipment and intangible assets |
(404,603) |
(460,652) |
Proceeds from sale of property and equipment |
1,160 |
286 |
Purchase of financial instruments |
(404,600) |
(1,884,488) |
Proceeds from sale of financial investment |
19,619 |
1,850,884 |
Interest received on time deposits and financial instruments |
125,359 |
61,515 |
Interest received on credit
sales |
92,136 |
56,265 |
Payment for acquired businesses, net of cash acquired |
- |
(5,509) |
Net cash used in investing activities |
(570,929) |
(381,699) |
Financing activities: |
|
|
Proceeds from borrowings |
197,824 |
1,064,301 |
Repayment of borrowings |
(136,099) |
(964,584) |
Interest and commission paid |
(611,193) |
(543,193) |
Lease payments |
(105,226) |
(112,085) |
Net cash used in financing activities |
(654,694) |
(555,561) |
|
|
|
Net decrease in cash and cash equivalents |
(1,593,142) |
(2,671,647) |
|
|
|
Cash and cash equivalents at 1 January |
6,299,875 |
7,501,388 |
Inflation effect on cash and
cash equivalents |
(1,003,254) |
(1,799,104) |
Effects
of exchange rate changes on cash and cash equivalents and
restricted cash |
1,148,164 |
660,230 |
Cash and cash equivalents at 30 June |
4,851,643 |
3,690,867 |
|
|
|
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 June
2023.Unaudited. |
(in TRY
million) |
Three months ended June 30, |
Six months ended June 30, |
|
2023 |
2022 |
2023 |
2022 |
Net income/(loss) for the period |
881.1 |
(782.7) |
675.8 |
(2,081.4) |
Taxation on income |
- |
- |
- |
- |
Financial income |
1,443.2 |
716.1 |
1,615.2 |
1,463.1 |
Financial expenses |
(714.8) |
(571.1) |
(1,046.9) |
(1,092.6) |
Depreciation and amortization |
(204.9) |
(140.5) |
(394.3) |
(272.3) |
Monetary gains/(losses) |
203.0 |
33.5 |
339.5 |
(202.8) |
EBITDA |
154.6 |
(820.7) |
162.3 |
(1,976.8) |
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 June 2023.
Unaudited. |
|
Three months ended June 30, |
Six months ended June 30, |
|
2023 |
2022 |
2023 |
2022 |
Revenue |
5,893.6 |
4,126.0 |
10,821.5 |
8,381.1 |
Cost of
inventory sold |
(4,124.3) |
(3,469.4) |
(7,552.3) |
(7,202.4) |
Gross Contribution |
1,769.3 |
656.6 |
3,269.2 |
1,178.7 |
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 June 2023.
Unaudited. |
|
Three months ended June 30, |
Six months ended June 30, |
|
2023 |
2022 |
2023 |
2022 |
Revenue |
5,893.6 |
4,126.0 |
10,821.5 |
8,381.1 |
Reversal
of IAS 29 adjustment |
147.6 |
1,264.3 |
541.9 |
2,991.6 |
IAS 29-Unadjusted Revenue |
5,746.0 |
2,861.7 |
10,279.6 |
5,389.5 |
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 June 2023. Unaudited. |
|
Three months ended June 30, |
Six months ended June 30, |
|
2023 |
2022 |
2023 |
2022 |
Revenue |
5,893.6 |
4,126.0 |
10,821.5 |
8,381.1 |
Cost of
inventory sold |
(4,124.3) |
(3,469.4) |
(7,552.3) |
(7,202.4) |
Gross Contribution |
1,769.3 |
656.6 |
3,269.2 |
1,178.7 |
Reversal
of IAS 29 adjustment |
(158.1) |
(108.9) |
(209.8) |
(275.0) |
IAS 29 -
Unadjusted Gross Contribution |
1,927.4 |
765.5 |
3,479.0 |
1,453.7 |
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 June 2023. Unaudited. |
|
Three months ended |
|
30 June 2023 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 June
2023 |
30 June 2022 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 June
2022 |
Net income/(loss)
for the period |
881.1 |
(100.2) |
981.3 |
(782.7) |
(567.2) |
(215.5) |
Taxation on
income |
- |
- |
- |
- |
- |
- |
Financial
income |
1,443.2 |
19.0 |
1,424.2 |
716.1 |
235.7 |
480.4 |
Financial
expenses |
(714.8) |
(10.2) |
(704.6) |
(571.1) |
(173.0) |
(398.1) |
Depreciation and
amortization |
(204.9) |
(92.7) |
(112.2) |
(140.5) |
(88.8) |
(51.7) |
Monetary gains |
203.0 |
203.0 |
- |
33.5 |
33.5 |
- |
IAS 29-Unadjusted EBITDA |
|
|
374.0 |
|
|
(246.2) |
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 June 2023. Unaudited. |
|
Six months ended |
|
30 June 2023 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 June
2023 |
30 June 2022 |
Reversal of IAS 29
Adjustment |
IAS 29-Unadjusted30 June
2022 |
Net income/(loss)
for the period |
675.8 |
(225.5) |
901.3 |
(2,081.4) |
(1,626.2) |
(455.2) |
Taxation on
income |
- |
- |
- |
- |
- |
- |
Financial
income |
1,615.2 |
32.2 |
1,583.0 |
1,463.1 |
549.6 |
913.5 |
Financial
expenses |
(1,046.9) |
(31.8) |
(1,015.1) |
(1,092.6) |
(386.9) |
(705.7) |
Depreciation and
amortization |
(394.3) |
(177.9) |
(216.4) |
(272.3) |
(158.3) |
(114.0) |
Monetary
gains/(losses) |
339.5 |
339.5 |
- |
(202.8) |
(202.8) |
- |
IAS 29-Unadjusted EBITDA |
|
|
549.8 |
|
|
(549.0) |
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 June 2023.Unaudited. |
(in TRY million) |
Three months ended June 30, |
Six months ended June 30, |
|
2023 |
2022 |
2023 |
2022 |
Net cash provided by/(used in)
operating activities |
(431.6) |
570.0 |
(367.5) |
(1,734.4) |
Capital expenditures |
(175.6) |
(293.4) |
(404.6) |
(460.7) |
Proceeds from the sale of
property and equipment |
0.1 |
0.2 |
1.2 |
0.3 |
Free Cash Flow |
(607.1) |
276.8 |
(770.9) |
(2,194.8) |
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 June 2023. |
|
As of June 30, 2023 |
As of December 31, 2022 |
Current assets |
9,432.2 |
10,034.8 |
Cash and cash equivalents |
(4,867.6) |
(6,307.3) |
Financial investments |
(524.3) |
(21.0) |
Current liabilities |
(7,969.4) |
(9,277.4) |
Bank borrowings, current |
79.5 |
15.6 |
Lease liabilities, current |
140.9 |
188.5 |
Net Working Capital |
(3,708.7) |
(5,366.8) |
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 June
2023.) |
|
Restatement Method |
Unaudited Unadjusted30 June
2023 |
IAS 29Adjustment |
Unaudited Adjusted30 June
2023 |
Unaudited Unadjusted31 Dec
2022 |
IAS 29Adjustment |
Audited Adjusted31 Dec 2022 |
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
1 |
4,867,634 |
- |
4,867,634 |
5,266,008 |
1,041,302 |
6,307,310 |
Restricted cash |
1 |
92,718 |
- |
92,718 |
107,427 |
21,243 |
128,670 |
Financial investments |
1 |
524,344 |
- |
524,344 |
17,557 |
3,471 |
21,028 |
Trade receivables |
1 |
601,881 |
- |
601,881 |
664,221 |
131,343 |
795,564 |
Due from related parties |
1 |
9,748 |
- |
9,748 |
1,718 |
339 |
2,057 |
Loan receivables |
1 |
1,905 |
- |
1,905 |
3,514 |
695 |
4,209 |
Inventories |
2 |
2,567,360 |
71,542 |
2,638,902 |
1,724,330 |
417,526 |
2,141,856 |
Contract assets |
1 |
54,585 |
- |
54,585 |
15,348 |
3,035 |
18,383 |
Other current assets |
3 |
625,970 |
14,553 |
640,523 |
506,890 |
108,880 |
615,770 |
Total current assets |
|
9,346,145 |
86,095 |
9,432,240 |
8,307,013 |
1,727,834 |
10,034,847 |
Non-current assets: |
|
|
|
|
|
|
|
Property and equipment |
2 |
214,110 |
158,232 |
372,342 |
221,626 |
183,199 |
404,825 |
Intangible assets |
2 |
878,188 |
314,134 |
1,192,322 |
655,891 |
357,174 |
1,013,065 |
Right of use assets |
2 |
234,251 |
201,435 |
435,686 |
261,091 |
264,169 |
525,260 |
Loan receivables |
1 |
1,510 |
- |
1,510 |
3,858 |
762 |
4,620 |
Other non-current assets |
3 |
25,680 |
867 |
26,547 |
62,700 |
12,779 |
75,479 |
Total non-current assets |
|
1,353,739 |
674,668 |
2,028,407 |
1,205,166 |
818,083 |
2,023,249 |
Total assets |
|
10,699,884 |
760,763 |
11,460,647 |
9,512,179 |
2,545,917 |
12,058,096 |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Bank borrowings |
1 |
79,546 |
- |
79,546 |
13,049 |
2,580 |
15,629 |
Lease liabilities |
1 |
140,863 |
- |
140,863 |
157,414 |
31,127 |
188,541 |
Wallet deposits |
1 |
101,822 |
- |
101,822 |
113,493 |
22,443 |
135,936 |
Trade payables and payables to merchants |
1 |
6,359,902 |
- |
6,359,902 |
5,886,538 |
1,164,006 |
7,050,544 |
Due to related parties |
1 |
4,555 |
- |
4,555 |
5,579 |
1,103 |
6,682 |
Provisions |
1 |
67,188 |
- |
67,188 |
395,025 |
78,113 |
473,138 |
Employee benefit obligations |
1 |
130,293 |
- |
130,293 |
156,069 |
30,861 |
186,930 |
Contract liabilities and merchant advances |
1 |
812,442 |
- |
812,442 |
638,556 |
126,268 |
764,824 |
Other current liabilities |
3 |
254,078 |
18,711 |
272,789 |
367,091 |
88,086 |
455,177 |
Total current liabilities |
|
7,950,689 |
18,711 |
7,969,400 |
7,732,814 |
1,544,587 |
9,277,401 |
Non-current liabilities: |
|
|
|
|
|
|
|
Bank borrowings |
1 |
5,890 |
- |
5,890 |
10,924 |
2,160 |
13,084 |
Lease liabilities |
1 |
90,049 |
- |
90,049 |
104,953 |
20,754 |
125,707 |
Employee benefit obligations |
1 |
77,289 |
- |
77,289 |
16,457 |
3,254 |
19,711 |
Other non-current liabilities |
2 |
119,896 |
88,328 |
208,224 |
77,076 |
98,507 |
175,583 |
Total non-current liabilities |
|
293,124 |
88,328 |
381,452 |
209,410 |
124,675 |
334,085 |
Equity: |
|
|
|
|
|
|
|
Share capital |
4 |
65,200 |
297,278 |
362,478 |
65,200 |
297,278 |
362,478 |
Other capital reserves |
4 |
249,061 |
173,650 |
422,711 |
215,245 |
170,986 |
386,231 |
Share premiums |
4 |
4,260,737 |
6,267,275 |
10,528,012 |
4,260,737 |
6,267,275 |
10,528,012 |
Accumulated deficit |
5 |
(2,118,927) |
(6,084,479) |
(8,203,406) |
(2,971,227) |
(5,858,884) |
(8,830,111) |
Total equity |
|
2,456,071 |
653,724 |
3,109,795 |
1,569,955 |
876,655 |
2,446,610 |
Total equity and liabilities |
|
10,699,884 |
760,763 |
11,460,647 |
9,512,179 |
2,545,917 |
12,058,096 |
|
|
|
|
|
|
|
|
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 June
2023. Unaudited.) |
|
|
Three Months Ended |
|
Restatement Method |
Unaudited Unadjusted30 June
2023 |
IAS 29Adjustment |
Unaudited Adjusted30 June
2023 |
Unaudited Unadjusted30 June
2022 |
IAS 29Adjustment |
Unaudited Adjusted30 June
2022 |
|
|
|
|
|
|
|
|
Sale of goods (1P) |
6 |
4,280,296 |
108,283 |
4,388,579 |
2,304,985 |
1,017,598 |
3,322,583 |
Marketplace revenue (3P) |
6 |
761,220 |
20,311 |
781,531 |
291,164 |
127,954 |
419,118 |
Delivery service revenue |
6 |
526,118 |
14,212 |
540,330 |
225,156 |
99,408 |
324,564 |
Other |
6 |
178,428 |
4,735 |
183,163 |
40,322 |
19,425 |
59,747 |
Revenues |
|
5,746,062 |
147,541 |
5,893,603 |
2,861,627 |
1,264,385 |
4,126,012 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Cost of inventory sold |
7 |
(3,818,634) |
(305,684) |
(4,124,318) |
(2,096,169) |
(1,373,242) |
(3,469,411) |
Shipping and packaging expenses |
6 |
(501,790) |
(13,217) |
(515,007) |
(264,617) |
(118,940) |
(383,557) |
Payroll and outsource staff expenses |
6 |
(585,190) |
(20,704) |
(605,894) |
(303,786) |
(145,711) |
(449,497) |
Advertising expenses |
6 |
(359,347) |
(18,524) |
(377,871) |
(331,676) |
(147,721) |
(479,397) |
Technology expenses |
9 |
(63,779) |
(4,208) |
(67,987) |
(32,820) |
(18,926) |
(51,746) |
Depreciation and amortization |
8 |
(112,208) |
(92,740) |
(204,948) |
(51,711) |
(88,768) |
(140,479) |
Other operating expenses |
9 |
(179,385) |
(10,945) |
(190,330) |
(92,903) |
(43,860) |
(136,763) |
Other operating income |
9 |
136,069 |
6,346 |
142,415 |
14,178 |
9,464 |
23,642 |
|
|
|
|
|
|
|
|
Operating Income/(loss) |
|
261,798 |
(312,135) |
(50,337) |
(297,877) |
(663,319) |
(961,196) |
|
|
|
|
|
|
|
|
Financial income |
6 |
1,424,171 |
18,988 |
1,443,159 |
480,430 |
235,664 |
716,094 |
Financial expenses |
6 |
(704,639) |
(10,128) |
(714,767) |
(398,081) |
(173,000) |
(571,081) |
Monetary gains |
10 |
- |
203,039 |
203,039 |
- |
33,503 |
33,503 |
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
981,330 |
(100,236) |
881,094 |
(215,528) |
(567,152) |
(782,680) |
|
|
|
|
|
|
|
|
Taxation on income |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Income/(loss) for the period |
|
981,330 |
(100,236) |
881,094 |
(215,528) |
(567,152) |
(782,680) |
|
|
|
|
|
|
|
|
(Amounts expressed in thousands of Turkish lira (TRY); adjusted
figures in terms of the purchasing power of the TRY at 30 June
2023. Unaudited.) |
|
|
Six Months Ended |
|
Restatement Method |
Unaudited Unadjusted30 June
2023 |
IAS 29Adjustment |
Unaudited Adjusted30 June
2023 |
Unaudited Unadjusted30 June
2022 |
IAS 29Adjustment |
Unaudited Adjusted30 June
2022 |
|
|
|
|
|
|
|
|
Sale of goods (1P) |
6 |
7,582,984 |
391,601 |
7,974,585 |
4,336,522 |
2,410,780 |
6,747,302 |
Marketplace revenue (3P) |
6 |
1,408,347 |
78,991 |
1,487,338 |
535,681 |
293,722 |
829,403 |
Delivery service revenue |
6 |
1,002,232 |
57,350 |
1,059,582 |
448,118 |
252,099 |
700,217 |
Other |
6 |
286,035 |
13,936 |
299,971 |
69,191 |
34,973 |
104,164 |
Revenues |
|
10,279,598 |
541,878 |
10,821,476 |
5,389,512 |
2,991,574 |
8,381,086 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Cost of inventory sold |
7 |
(6,800,554) |
(751,708) |
(7,552,262) |
(3,935,807) |
(3,266,614) |
(7,202,421) |
Shipping and packaging expenses |
6 |
(933,058) |
(51,546) |
(984,604) |
(562,903) |
(319,461) |
(882,364) |
Payroll and outsource staff expenses |
6 |
(1,065,229) |
(61,246) |
(1,126,475) |
(583,152) |
(338,085) |
(921,237) |
Advertising expenses |
6 |
(636,639) |
(42,436) |
(679,075) |
(657,841) |
(369,274) |
(1,027,115) |
Technology expenses |
9 |
(122,221) |
(9,557) |
(131,778) |
(62,099) |
(41,113) |
(103,212) |
Depreciation and amortization |
8 |
(216,433) |
(177,864) |
(394,297) |
(114,032) |
(158,306) |
(272,338) |
Other operating expenses |
9 |
(329,990) |
(25,206) |
(355,196) |
(163,051) |
(105,024) |
(268,075) |
Other operating income |
9 |
157,962 |
12,288 |
170,250 |
26,318 |
20,243 |
46,561 |
|
|
|
|
|
|
|
|
Operating Income/(loss) |
|
333,436 |
(565,397) |
(231,961) |
(663,055) |
(1,586,060) |
(2,249,115) |
|
|
|
|
|
|
|
|
Financial income |
6 |
1,582,952 |
32,222 |
1,615,174 |
913,509 |
549,610 |
1,463,119 |
Financial expenses |
6 |
(1,015,133) |
(31,723) |
(1,046,856) |
(705,695) |
(386,865) |
(1,092,560) |
Monetary gains/(losses) |
10 |
- |
339,473 |
339,473 |
- |
(202,800) |
(202,800) |
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
901,255 |
(225,425) |
675,830 |
(455,241) |
(1,626,115) |
(2,081,356) |
|
|
|
|
|
|
|
|
Taxation on income |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
Income/(loss) for the period |
|
901,255 |
(225,425) |
675,830 |
(455,241) |
(1,626,115) |
(2,081,356) |
|
|
|
|
|
|
|
|
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 June
2023. Unaudited.) |
|
Unaudited |
|
Unaudited |
Unaudited |
|
Unaudited |
|
Unadjusted |
|
Adjusted |
Unadjusted |
|
Adjusted |
|
1 Jan- 30 June 2023 |
IAS 29 adjustment |
1 Jan- 30 June 2023 |
1 Jan- 30 June 2022 |
IAS 29 adjustment |
1 Jan- 30 June 2022 |
Income/(loss) before income taxes |
901,255 |
(225,425) |
675,830 |
(455,241) |
(1,626,116) |
(2,081,357) |
Adjustments to reconcile income/(loss) before income taxes
to cash flows from operating activities: |
(502,654) |
1,136,859 |
634,205 |
(119,169) |
2,340,605 |
2,221,436 |
Interest and commission expenses |
619,650 |
24,074 |
643,724 |
389,818 |
218,328 |
608,146 |
Depreciation and amortization |
216,433 |
177,864 |
394,297 |
114,032 |
158,306 |
272,338 |
Interest income on time deposits and financial instrument |
(127,423) |
(6,493) |
(133,916) |
(55,761) |
(25,763) |
(81,524) |
Interest income on credit sales |
(87,494) |
(4,642) |
(92,136) |
(36,660) |
(19,605) |
(56,265) |
Provision for unused vacation liability |
20,355 |
1,205 |
21,560 |
10,342 |
5,835 |
16,177 |
Provision for personnel bonus |
76,069 |
4,504 |
80,573 |
30,986 |
17,502 |
48,488 |
Provision for legal cases |
6,798 |
402 |
7,200 |
404 |
228 |
632 |
Provision for doubtful receivables |
14,873 |
(14) |
14,859 |
8,318 |
4,698 |
13,016 |
Provision for impairment of trade goods, net |
24,234 |
21,388 |
45,622 |
(1,857) |
15,977 |
14,120 |
Provision for post-employment benefits |
21,763 |
1,289 |
23,052 |
1,350 |
815 |
2,165 |
Provision for share based payment |
33,816 |
2,664 |
36,480 |
57,317 |
32,337 |
89,654 |
Adjustment for impairment loss of financial investments |
(135,967) |
(8,081) |
(144,048) |
48,985 |
19,727 |
68,712 |
Reversal of provision for the Competition Board penalty |
(92,018) |
- |
(92,018) |
- |
- |
- |
Provision for Settlement of Legal Proceedings |
11,577 |
686 |
12,263 |
- |
- |
- |
Provision for Turkish Capital Markets Board fee |
19,938 |
- |
19,938 |
- |
- |
- |
Non-cash charges |
- |
- |
- |
(881) |
(530) |
(1,411) |
Net foreign exchange differences |
(1,125,258) |
(22,906) |
(1,148,164) |
(685,562) |
(372,680) |
(1,058,242) |
Change in provisions due to inflation |
- |
(107,124) |
(107,124) |
- |
(120,856) |
(120,856) |
Monetary effect on non-operating activities |
- |
1,052,043 |
1,052,043 |
- |
2,406,286 |
2,406,286 |
Changes in net working capital |
|
|
|
|
|
|
Change in trade payables and payables to merchants |
473,364 |
(1,164,006) |
(690,642) |
150,551 |
(2,320,518) |
(2,169,967) |
Change in inventories |
(867,264) |
324,596 |
(542,668) |
(463,428) |
815,942 |
352,514 |
Change in trade receivables |
46,623 |
138,991 |
185,614 |
20,175 |
148,894 |
169,069 |
Change in contract liabilities and merchant advances |
173,886 |
(126,268) |
47,618 |
72,966 |
(100,458) |
(27,492) |
Change in contract assets |
(39,237) |
3,035 |
(36,202) |
(2,014) |
3,534 |
1,520 |
Change in other liabilities |
(81,676) |
(188,959) |
(270,635) |
14,540 |
(168,685) |
(154,145) |
Change in other assets and receivables |
(63,392) |
128,938 |
65,546 |
(186,620) |
250,125 |
63,505 |
Change in due from related parties |
(8,030) |
339 |
(7,691) |
679 |
1,538 |
2,217 |
Change in due to related parties |
(1,024) |
(1,103) |
(2,127) |
28,655 |
(45,771) |
(17,116) |
Post-employment benefits paid |
(9,887) |
(585) |
(10,472) |
(1,331) |
(752) |
(2,083) |
Payments for concluded litigation |
(274,132) |
(10,791) |
(284,923) |
(1,040) |
(587) |
(1,627) |
Payments for personnel bonus |
(119,982) |
(7,733) |
(127,715) |
(53,028) |
(36,571) |
(89,599) |
Payments for unused vacation liabilities |
(2,218) |
(145) |
(2,363) |
(774) |
(488) |
(1,262) |
Collections of doubtful receivables |
844 |
(1,738) |
(894) |
- |
- |
- |
Net cash used in operating activities |
(373,524) |
6,005 |
(367,519) |
(995,079) |
(739,308) |
(1,734,387) |
Investing activities: |
|
|
|
|
|
|
Purchases of property and equipment and intangible assets |
(365,054) |
(39,549) |
(404,603) |
(281,099) |
(179,553) |
(460,652) |
Proceeds from sale of property and equipment |
856 |
304 |
1,160 |
313 |
(27) |
286 |
Purchase of financial instruments |
(389,252) |
(15,348) |
(404,600) |
(1,331,152) |
(553,336) |
(1,884,488) |
Proceeds from sale of financial investment |
18,431 |
1,188 |
19,619 |
1,315,652 |
535,232 |
1,850,884 |
Interest received on time
deposits and financial instruments |
117,639 |
7,720 |
125,359 |
40,946 |
20,569 |
61,515 |
Interest received on credit
sales |
87,494 |
4,642 |
92,136 |
36,660 |
19,605 |
56,265 |
Payment for acquired businesses, net of cash acquired |
- |
- |
- |
(3,439) |
(2,070) |
(5,509) |
Net cash used in investing activities |
(529,886) |
(41,043) |
(570,929) |
(222,119) |
(159,580) |
(381,699) |
Financing activities: |
|
|
|
|
|
|
Proceeds from borrowings |
186,768 |
11,056 |
197,824 |
680,127 |
384,174 |
1,064,301 |
Repayment of borrowings |
(128,493) |
(7,606) |
(136,099) |
(616,404) |
(348,180) |
(964,584) |
Interest and commission paid |
(588,937) |
(22,256) |
(611,193) |
(348,311) |
(194,882) |
(543,193) |
Lease payments |
(99,344) |
(5,882) |
(105,226) |
(71,626) |
(40,459) |
(112,085) |
Net cash used in financing activities |
(630,006) |
(24,688) |
(654,694) |
(356,214) |
(199,347) |
(555,561) |
Net decrease in cash and cash equivalents |
(1,533,416) |
(59,726) |
(1,593,142) |
(1,573,412) |
(1,098,235) |
(2,671,647) |
Cash and cash equivalents at 1 January |
5,259,801 |
1,040,074 |
6,299,875 |
3,812,605 |
3,688,783 |
7,501,388 |
Inflation effect on cash and
cash equivalents |
- |
(1,003,254) |
(1,003,254) |
- |
(1,799,104) |
(1,799,104) |
Effects of exchange rate
changes on cash and cash equivalents and restricted cash |
1,125,258 |
22,906 |
1,148,164 |
431,217 |
229,013 |
660,230 |
Cash and cash equivalents at 30 June |
4,851,643 |
- |
4,851,643 |
2,670,410 |
1,020,457 |
3,690,867 |
|
|
|
|
|
|
|
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 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; and
- 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.
- 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 59 million members with
approximately 195 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 101,300 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 45.4 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) the outcome of litigation, including the final
approval of the proposed class action settlement and execution of
the final class action settlement agreement; (k) our ability to
expand our base of Hepsiburada Premium members, and grow and
externalize the services of our strategic assets; and (l)
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 financial
information as of and for the three and six months ended June 30,
2023 and 2022 and as of and for the year ended December 31, 2022.
The interim information has not been audited or reviewed by the
Company’s auditors. The unaudited consolidated
financial information 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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