Q1 2024 D-Market Elektronik Hizmetler ve Ticaret AS Earnings Call
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Konstantinos: Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your caller's call operator. Welcome and thank you for joining the Hep C Burada conference call and live webcast to present and discuss the first quarter 2024 financial results. All participants will be listening only to the part of the conference that is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Ms. Nilhan Onal Gokcetekin, CEO, Mr. Seckin Koseoglu, CFO, and Ms. Helin Celikbilek, Investor Relations Director. Ms. Celikbilek, you may now proceed.
Ladies and gentlemen, thank you for standing by I'm Konstantinos your chorus call operator.
Thank you for joining the hips you brought on a conference call and live webcast to present and discuss the first quarter 2024 financial results.
All participants will be listen only mode and the conference is being recorded.
The presentation will be followed by a question and answer session.
Operator: If you get one of the systems during the conference call, you may signal an operator by pressing star and zero on your telephone.
You Didnt wanted assistance during the conference call you May signal, an operator by pressing Star then zero on your telephone.
Unknown Executive: On this time, I would like to turn the conference over to Ms. Nilhan on Alpukchatekin, CEO, Mr. Sejkintyoseo, CFO, and Ms. Helene Chelikbilek, Investor Relations Director.
At this time I would like to turn the conference over to Mr. Han on our books at the King CEO, Mr. Such cute yourself, Who's CFO and Mr. Lalit Malik Investor Relations director.
Helin Celikbilek: Ms. Chelikbilek, you may now proceed. Thanks, operators.
Mr. <unk>: Mr. <unk> you May now proceed.
Unknown Executive: Thank you for joining us today for the first quarter, 2020, earnings call.
Mr. <unk>: Thanks, operator, thank you for joining us today for <unk> first quarter 2024 earnings call I'm pleased to be joined on the call today by IPO Nihon.
Helin Sinem Celikbilek: 2024 earnings call. I'm pleased to be joined on the call today by our CEO Nilhan Onal Gokcetekin and our CFO, Seckin Koseoglu. The following discussion, including responses to your questions, reflects management views as of today only, and we undertake no obligation to update or revise this information except as required by law. Certain statements made on today's call are forward-looking statements, and actual results may differ materially from these forward-looking statements.
Unknown Executive: I'm pleased to be joined on the call today by RTO, Ms. Nilhan on Alpukchatekin and RTFO Sejkintyoseo. The following discussion, including responses to your questions, reflects management views as of today's days only, and we undertake no obligation to update or revise this information, except as required by law. Certain statements made on today's call are forward-looking statements, and actual results may differ materially from these forward-looking statements. These refer to today's earnings release, as well as the risk factors described in the safe harbor slide of today's supplemental slide date. Today's press release, the 6K, are form 25 with the HTC on April 30, 2024, and other HTC findings for informational factors that could cause our actual results to differ materially from these forward-looking statements.
Unknown Executive: Ill just your thinking in our CFO search Geek yourself, the following discussion including responses to your questions reflects management's views as of today's date, only and we undertake no obligation to update or revise this information except as required by law circumstance made on today's call are forward looking statements and actual results.
Unknown Executive: <unk> may differ materially from these forward looking statements.
Helin Sinem Celikbilek: Please refer to today's earnings release as well as the risk factors described in the Safe Harbor slide of today's supplemental slide deck. Also, refer to today's press release, the 6K, our Form 20 which will be filed with the ACC on April 30, 2024, and other ACC filings for informational factors that could cause our actual results to differ materially from these forward-looking statements. Also, we will reference certain non-IFRS measures during today
Speaker Change: Please refer to today's earnings release.
Speaker Change: Risk factors described in the Safe Harbor slide of today's supplemental slide date today's press release. The 6K, our form 20-F filed with the FCC on April 32024, and other SEC filings for information on factors that could cause our actual results to differ materially from these forward looking statements.
Unknown Executive: Also, we will reference certain non-affirmed measures during today's call. Please refer to the appendix of our supplemental slide date, as well as today's press release for a presentation of the most accurate comparable IFRS measure, and the relevant IFRS non-affirmed reconciliation.
Speaker Change: Also we will reference certain non <unk> measures during today's call. Please refer to the appendix slides supplemental slide deck.
Helin Sinem Celikbilek: Please refer to the appendix of our supplemental slide deck as well as today's press release for a presentation of the most directly comparable IFRS measure and the relevant IFRS, non-IFRS reconciliation. As a reminder, a replay of this call will be available on our investor relations website, and with that, I will hand it over to our CEO, Nilhan. Thank you, Helen.
Speaker Change: <unk> press release for a representation of the most directly comparable <unk> measures and the relevant.
Speaker Change: There has been consolidation as a reminder, a replay of this call will be available on our Investor relations website, and with that I will hand, it over to our CEO Neil.
Unknown Executive: As a reminder, a replay of this call will be available on our English relations website.
Nilhan Gokcetekin: And with that, I will hand it over to RTO, Ms. Nilhan. Thank you, Helen. Welcome everyone, and thank you for joining us. I'm delighted to be with you today to present our first quarter result. It has been a strong start to the year as reflects its old all over result. Motively, we be our G&E and EVTA guidance for the quarter. This execution, accelerated by the favorable base effects of last year due to a tragic earthquake, drove 138% euro near G&E growth. Adjusted for inflation, our G&E growth was a 443%; our growth contribution margin improved by 150 basis points to 12%, marking the highest sense of our IPO.
Nilhan Gokcetekin: Welcome everyone, and thank you for joining us. I'm delighted to be with you today to present our first quarter results. It has been a strong start to the year, as reflected in all of our results. Notably, we beat our GMB and EVTA guidance for the quarter. Good execution accelerated by the favorable base effect of last year due to a tragic earthquake drove 138% year-on-year GMB growth. Adjusted for inflation, our GMB growth was a solid 43%.
Neil: Thank you Haley and thank you for joining us I'm delighted to be here today to present, our first quarter is.
It has been a strong start for the year is reflective of all of it is up marginally BB <unk> and EBITDA guidance for the quarter.
Neil: Sure.
Speaker Change: He says by the favorable effects of last year due to the tragic earthquake.
Speaker Change: I'm, just Turkey, firsthand Huron EOG admin growth.
Speaker Change: Adjusted for inflation.
Speaker Change: The growth was a solid 43%.
Nilhan Gokcetekin: Our growth contribution margin improved by 150 basis points to 12%, marking the highest since our IPO. Our EVTA continued this uptrend, rising 120 basis points year-on-year to 2.4% of GMB on an unadjusted basis. Adjusted for inflation, our EVTA as a percentage of GMB improved by 70 basis points year-on-year to 0.8%. These results are a clear sign of our winning strategy.
Speaker Change: Our contribution margin improved by 50 basis points to vascular sun, marking the highest since our IPO. Our EBITDA continue this up trend driving comps and 70 basis points year on year to two 4% of GLA on an unadjusted basis.
Nilhan Gokcetekin: Our EVTA continued its uptrend, rising 100 and 20 basis points, 0.0 to 2.4% of G&E on an unadjusted basis. Adjusted for inflation, our EVTA is the person to drop G&E improved by 70 basis points to euro near to 8.8%.
Adjusted for inflation.
Speaker Change: The first one fifth of G&A improved by 70 basis points year on year to <unk>, 8%.
Nilhan Gokcetekin: This result is a clear sign of our winning strategy. Now let's have a look at a few of our operational metrics. Being 30 is most recommended; e-commerce brand once again with an MPS of 73 is a great source of pride. We are committed to advancing this performance to the next level. Our active customer base was 12.1 million, on an additional 111,000. We are going to see growing interest in our appealing lawyer's program, which has scale to 2.6 million numbers by the end of May. We recorded 29.3 million orders with 22% growth during the quarter. Our order frequency over the last around month reached 9.8.
Speaker Change: These results are a clear sign of our winning strategy.
No.
Speaker Change: Okay.
Speaker Change: Operational metric.
Nilhan Gokcetekin: Now, let's have a look at a few of our operational metrics. Being Turkey's most recommended e-commerce brand once again with an NPS of 73 is a great source of pride. We are committed to advancing this performance to the next level. Our active customer base was 12.1 million, with an additional 171,000 customers. We are glad to see growing interest in our appealing loyalty program, which has scaled to 2.6 million members by the end of May. We recorded 29.3 million orders with 22% growth during the quarter.
Speaker Change: Turkey's most vehicle handled ecommerce brand once again with an NPS of 73 is a great source of pride.
Speaker Change: Our commitment to advancing this performance to the next level.
Speaker Change: New customer base.
Speaker Change: $1 million on any additional comments they went to 1000 customers we.
Speaker Change: We are glad to see growing interest in our appealing loyalty program.
Speaker Change: Scaffold proof point 6 million members by the end of May.
Speaker Change: We recorded $9 3 million order at least 92% growth during the quarter.
Speaker Change: The order frequency over the last 12 months reached 9.8. This is towards the first time.
Nilhan Gokcetekin: Our order frequency over the last 12 months reached 9.8, and this is up 30% year-over-year. With an active merchant base of almost 102,000, we expanded our selection by 38% to nearly 248 million SKUs. Now, let me provide a snapshot of our quarterly progress on our top four strategic priorities.
Nilhan Gokcetekin: This is our 31st year over year. With an active merchant base of almost 100 and 2000, we extend with our selection by 38% to nearly 248 million SKUs.
Speaker Change: Year over yet neither have been merchant Faisal hallmark comment in 2000, and we expanded our extra my Turkey person for nearly 248 million Skus.
Nilhan Gokcetekin: Now let me provide a snapshot of our quarterly progress as on top four strategies for IoT. First is our loyalty program, HEPPS, to one of the premiums. The program's growing customer base signals customer satisfaction with our propositions. This is also evidenced by program's strong MPS. Also, premium numbers higher frequency significantly contribute to our overall growth.
Speaker Change: Now, let me provide a snapshot of our progress on top four strategic priorities first is our loyalty program hedge server at a premium.
Nilhan Gokcetekin: First is our loyalty program, Hepsiburada Premium. The program's growing customer base signals customer satisfaction with our proposition, which is also evidenced by its strong NPS.
Speaker Change: And growing customer base big enough.
Nilhan Gokcetekin: Also, premium numbers' higher frequency significantly contributes to our overall growth. Moving on to our second priority, which is differentiation with superior delivery services. Our superior delivery services are realized with our in-house company, HepsiJet. Merchant preference for HepsiJet services has risen significantly this quarter. Jet delivered 68% of total parcels on our platform. This is up by 5.1 percentage points year-on-year.
Speaker Change: Fiction retailer for optimization. This is also evidenced by programs strong NPS.
Speaker Change: Also premium numbers higher frequency.
Speaker Change: If he can click onto these starwood overall graph mood.
Nilhan Gokcetekin: Moving on to second priority, which is the transition with superior delivery services. Our superior delivery services is realized with our in-house company HEPPS. Merchants' preference for HEPPS has rise on significantly this quarter. Just delivered 68% of total parts of our platform; this is off by one 5.1% each point year on year. It's 82% next day delivery ratio among retail orders also confirms its integral role in our ecosystem. HEPPS is just brings wider satisfaction to the HEPPS, the broader customer. It's a reliable and high quality service, reflects in our strong customer satisfaction score of 8.5%. Our 30% differentiator is HEPPS: the pay.
Speaker Change: Moving on to second priority, which is differentiation with Stifel. Your daily service and our speed of delivery services in their lives with our inhouse company hedged digit merchant preference for his service his driver significantly this quarter.
Speaker Change: They were 68% of total parcel somehow.
Speaker Change: This is.
Nilhan Gokcetekin: Its 82% next day delivery ratio among retail orders also confirms its integral role in our ecosystem. HepsiJet brings wider satisfaction to the HepsiBurada customers. Its fast, reliable, and high quality service reflects in our strong customer satisfaction score of 87. Our third differentiator is HepsiPay.
Speaker Change: By one 5.1 percentage point year on year.
Speaker Change: <unk>.
Speaker Change: And next day delivery ratio among retail orders also terms, it's integral role in our ecosystem.
Speaker Change: Does it breaks why there's a distinction so they had.
Speaker Change: It's.
Speaker Change: Reliable and high quality service at least in our strong customer satisfaction score of 80 stellar our third differentiator is taped the pig in scaling its offering with additions to its always a competitive suite of payments and lending services.
Nilhan Gokcetekin: It's scaling its offering with addition to its already comprehensive suite of payments and landing services.
Nilhan Gokcetekin: Fourth is our strongest muscle, offering our strongest muscle to off platform customers. Let me start with HEPPS the day, which has more than doubled its volume year on year in Q1. Accordingly, with 3.2 million parts of deliver, its off platform volume corresponded to nearly 33% of its total Q1. On the next slide, our elaborates on HEPPS the pay, including its off platform performance. Let me dive into how we are providing these cutting-edge solutions with HEPPS the pay. In the current economic climate of high interest rates, being able to offer a suite of alternatives is a huge advantage.
Speaker Change: <unk> is our strongest muscle offering our strongest month or so off platform customers, maybe start with hips, which has more than doubled its volume year on year in Q1, and causing me with $3 2 million pesos.
Nilhan Gokcetekin: Its scaling is offering additions to its already comprehensive suite of payments and landing services. Fourth, it is offering our strongest muscles to off-platform customers. Let me start with Heptigest, which has more than doubled its volume year-on-year in Q1. Accordingly, with 3.2 million parcels delivered, its off-platform volume corresponded to nearly 33% of its total volume in Q1.
Speaker Change: It's always been a core volume corresponded to nearly 33% of its total kilowatt all the next life.
Nilhan Gokcetekin: On the next slide, I'll elaborate on HepsiPay, including its off-platform performance. Now, let me dive into how we are providing these cutting-edge solutions with HEPCEPAY. In the current economic climate of high interest rates, being able to offer a suite of alternatives is a huge advantage. In January, we took the further step of including our consumer finance loans in this. Meanwhile, our BNPL solution is the largest non-bank BNPL solution in the market.
Jorge: Jorge on hips debate, including its all fiasco.
Speaker Change: Yes.
Speaker Change: Maybe dive into how we are providing these cutting edge solutions the types of pain in the current economic alignment of high interest rates being able to offer a suite of lifetime that this is a huge advantage in January we took the further step of including other consumers.
Nilhan Gokcetekin: In January, we took the further step of including our consumer finance loans to this debt. Meanwhile, our BRPL solution is the largest non-bank BRPL solution in the market. Overall, our BRPL and shopping loans are utilized in over 1.1 million orders over the last 12 months. On a broader scale over the last 12 months, total landing volume through our platform sleepers compares to the same period of last year, and it reached 8.1 billion lira. That's roughly equivalent to $290 million US dollars. HEPPS the pay aims to grow this business lying in a profitable manner and take a sizeable share in Turkey's $34 billion consumer loan market.
Speaker Change: And as loans to this day.
Speaker Change: Meanwhile.
Speaker Change: Would it be RPI solution is the largest nonbank beyond gas solution in the market overall.
Nilhan Gokcetekin: Overall, our BNPL and shopping loans were utilized in over 1.1 million orders over the last 12 months. On a broader scale, over the last 12 months, total lending volume through our platform tripled compared to the same period last year, and it reached 8.1 billion lira. That's roughly equivalent to 290 million US dollars.
Speaker Change: And shopping longer utilized in over 1.1 million order over the last 12 months on a broader scale over last 12 months total lending volume through our P&L.
Speaker Change: Compared to the same period of last year and it reached 8.1 billion dollar debt.
Speaker Change: Roughly equivalent to 209 familiar in U S dollars.
Nilhan Gokcetekin: HEPCEPAY aims to grow this business line in a profitable manner and take a sizable share in Turkey's 34 billion dollar consumer loan market. In this capacity, we will continue to leverage HEPCEPAY solutions as well as those of our partner banks to grow our e-commerce business. Aside from affordability aspects, our financial services also encompass the payment business. In offline retail, HEPCEPAY leads the market with its 15.7 million wallet base covering 18 million store cards.
Speaker Change: It's the PE aims to grow this business line in a profitable manner and take a sizable share in Turkey is 34 billion dollar consumer loan market. In this capacity, we will continue to leverage helps to pay solution as well as those of our partner banks to borrower to grow E Commerce.
Speaker Change: It's the PE aims to grow this business line in a profitable manner and take a sizable share in Turkey is 34 billion dollar consumer loan market. In this capacity, we will continue to leverage helps to pay solution as well as those of our partner banks to borrower to grow E Commerce.
Nilhan Gokcetekin: In this capacity, we will continue to leverage HEPPS, the pay solution, as well as those of our partner banks to grow our e-commerce business.
Speaker Change: Isn't it.
Nilhan Gokcetekin: A tight promise for the BRPL aspect. Our financial services also encompass the payments business. In off-line retail, HEPPS the pay leads the market with its 15.7 million wall of space covering 18 million dollars. Our monthly checkout solution, pay the HEPPS the pay, you don't provide that 28 key retailers just within less than a year of its launch. HEPPS the pay aims to capture a substantial share both in key accounts as well as in Turkey's size of low-minus the main market.
Speaker Change: And therefore.
Speaker Change: Therefore, the British aspect, our financial services also in corn basis, the payments business.
Speaker Change: Finally, Sam.
Speaker Change: He leaves the market. It is 15 points to 10 1 million was Spain, covering 18 million stock at all.
Nilhan Gokcetekin: Our one-click checkout solution, Pay with HEPCEPAY, is also live at 78 key retailers within less than a year of its launch. HEPCEPAY aims to capture a substantial share both in key accounts as well as in Turkey's sizable online SME market. And now, I'll end my part with our guidance. As we live through the second quarter, we observe the continuation of challenging macroeconomic conjecture, and the cooling of consumer demand to a certain extent. And yet, our platform preserves our relevance for consumer purchases as their trusted household brand.
Sam: Can you just check off solution, maybe that's the pain is also live it to that.
Speaker Change: Th cheesy tailored just within less than a year of its launch hits. The PE aims to capture that top special shares voting T E com as well as in Turkey sizable online SME market.
Nilhan Gokcetekin: And now, I'll add my part with our guidance. As we lead through the second quarter, we observe the continuation of challenging macroeconomic conjecture calling off consumer demand to a certain extent. And yet, our platform preserves our relevance for consumer purchases as their trust of households. Accordingly, the expected deliver growth at 75% euro during Q2 to 24. This is R&B growth in the first half is expected to double Euro. With continued through the cost management in place, V4C and ABTA within the range of 1.82% of R&B. As a reminder of our R&B Q2 last year, about 1.5%.
Speaker Change: And now I'll end my part with our guidance.
Speaker Change: We lived through the second quarter deals are the continuation of challenging macroeconomic conjuncture cooling golf consumer demand toys sorts of Nexstar and yet our platform preserve tornado ones for consumer purchases and they attract the powerful it's Brad.
Nilhan Gokcetekin: Accordingly, we expect to deliver growth around 75% year-on-year in Q2-24. With that, GMV growth in the first half is expected to double year-on-year. With continued prudent cost management in place, we foresee an NBTA within the range of 1.8 to 2% of GMV. As a reminder, our GMV in Q2 last year was 1.5%. So, we expect to deliver a year-on-year improvement in our profitability in Q2, and these figures I've referred to are an adjustment for inflation.
Speaker Change: He expects to deliver growth at two five for Sun humoral immunity to towards to amplify. This SG&A growth in the first half is expected to double year on year.
Speaker Change: Call it the prudent cost management in place, we foresee an EBITDA within the range of 48% to 2% of G. I mean isn't it.
Speaker Change: Kinda of a G. I mean Q2 last year about 1.51st time saw the expected data about a year on year and improvements in our profitability in Q2.
Nilhan Gokcetekin: So, we expect to deliver a year of year improvements in our profitability in Q2. And this year's time refers to R&B just for inflation.
Speaker Change: And this figure side referred to.
Speaker Change: That's 40 inflation.
Nilhan Gokcetekin: With this, I thank you very much for listening and leave the floor to Fish Kids over here to support to provide further insights to our financial performance.
Speaker Change: I. Thank you very much for listening and leave the floor to say skin audio sample to provide further insights to bother financial platform.
Seckin Koseoglu: Thank you, Nilhan, and welcome everyone. I'm glad to share that we had a robust start to the year with solid performance across all metrics. It's justice for inflation; GME grew by 43% in quarter one. Strong GME growth was through 17% average older wealthy growth, and the 22% increase in total order.
Seckin Koseoglu: Thank you, Nilhan, and welcome, everyone. I'm glad to share that we had a robust start to the year with solid performance across all metrics. Adjusted for inflation, GME grew by 43% in Q1. Strong GME growth was driven by 17% average order value growth and a 22% increase in total orders. Given the tragic earthquake in February last year and its inevitable impact on our business, last year's low base also had a positive impact on this growth performance.
Speaker Change: Thank you.
Speaker Change: Welcome everyone.
Speaker Change: Glad to share that we had a robust start to the year.
Speaker Change: Performance across all metrics.
Speaker Change: Adjusted for inflation, Jimmy grew by 43% in quarter one.
Speaker Change: Strongly unusual swapped through 17% average order value growth and a 22% increase in total orders.
Seckin Koseoglu: Given the tragic earthquake in February last year and its inevitable impact on our business, last year's low rate also has a positive impact on this growth performance. Growth contribution margin continued its improvement trend and reached 10.5%. Higher margins coupled with disciplines of its management resulted in 289 million TL every TA at 0.8% of GME.
Given the tragic earthquake in February last year.
Speaker Change: So it will impact on our business.
<unk> also has a positive impact on this growth performance.
Seckin Koseoglu: Growth contribution margin continues its improvement trend and reached 10.5%. Higher margins, coupled with disciplined OPEX management, resulted in 289 million TL EBTA at 0.8% of GMB. For more color on each of these, let's move on to the next slide.
Speaker Change: Gross contribution margin continues its improvement.
Speaker Change: 10, 5%.
Speaker Change: Higher margin, coupled with disciplined Opex management resulted in 289, new NPL.
Jim: At 8% Jim.
Seckin Koseoglu: For more color on each of these, let's move on to the next slide. First, our GME performance. 43% of GME growth came through 29.3 million orders in quarter one. Last month, order frequency also increased by 30% to 9.8%. Our marketplace operations corresponded to 68% of our business in quarter one, 24, at around the same level of quarter one last year.
Jim: For more color on each of these let's move onto the next slide.
Seckin Koseoglu: First, our GME performance. 43% of GME growth came through 29.3 million orders in Q1. Last 12-month order frequency also increased by 30% to 9.8. Our marketplace operations corresponded to 68% of our business in Q1-24 at around the same level as Q1 last year. There was a nearly 1.4% point shift towards non-electronics within G&E this quarter in line with our strategy.
Jim: First our <unk> performance.
Speaker Change: Three for example, Xiaomi growth came through 29 3 million orders in quarter one.
Speaker Change: Last 12 month order frequency also increased by 30% to 98.
Speaker Change: Our marketplace operations corresponding to 68% of our business in quarter, one 'twenty four.
Speaker Change: Same level of quarter, one last year.
Seckin Koseoglu: There was nearly 1.4% of point shift for non-electronics within GME in quarter in life without strategy.
Speaker Change: That was nearly one full percentage point shift towards non electronics.
Speaker Change: Within GM need this quarter is in line with our strategy.
Seckin Koseoglu: Let's have a look at our revenue growth dynamics. 45% revenue growth in the first quarter was achieved mainly through 38% retail and 32% marketplace operations revenue growth. Delivery service revenues, which correspond to 14% of total revenues, nearly doubled year-on-year. This was mainly due to the solid momentum in our off-platform business coupled with annual rises in unit delivery service charges above inflation. Our advertising services revenues doubled during this period as well. Meanwhile, other revenue lines grew by 148%.
Seckin Koseoglu: Let's look at our revenue growth dynamics. 45% of revenue growth in the first quarter was achieved mainly through 38% retail and 32% marketplace operations revenue growth. Delivery service revenues, which correspond to 14% of total revenues, nearly double year-on-year. This was mainly due to the solid momentum in our off-slap on business, coupled with annual rises in unit delivery service charges above inflation. Our advertising services revenues doubled during this series as well. Meanwhile, other revenue lines grew by 148%. Such performance was mainly through 4-fold growth in loyalty subscription revenues and higher fulfillment service revenues compared to quarter one 2023.
Speaker Change: Let us get our.
Speaker Change: Simon.
Speaker Change: 45% revenue growth in the first quarter was achieved mainly through towards the 80% retail and 32% marketplace operations revenue growth.
Speaker Change: Delivery service revenues, which corresponds to 14% of total revenues.
Speaker Change: <unk> doubled year on year this was.
Speaker Change: Mainly due to the solid momentum in our open platform business, coupled with annual rises in unit delivery service charges above inflation.
Speaker Change: Already we're sizing services revenues doubled during this period as well.
Speaker Change: Meanwhile, other revenue lines.
Speaker Change: 148 person.
Seckin Koseoglu: Such performance was mainly due to four-fold growth in loyalty subscription revenues and higher fulfillment service revenues compared to Q1-2023. On the margin side, adjusted for inflation, we recorded a 1.2 percentage points rise in the gross contribution margin, reaching 10.5%. Market improvement was mainly attributable to higher contribution of delivery service revenues from off-platform as well as advertising revenues. Let's move on to our A-B-C-A performance on the next slide.
Speaker Change: Such performance was mainly through full fold growth in loyalty subscription revenues and higher fulfillment service revenues compared to quarter one 2023.
Seckin Koseoglu: On the margin slide, adjusted for inflation, we recorded a 1.2 percentage points rise in the growth contribution margin, reaching 10.5%. Margin improvements was mainly attributable to higher contribution of delivery service revenues from off-slap on as well as advertising revenues.
Speaker Change: On the margin side.
Speaker Change: Adjusted for inflation really cold and at 1.2 percentage points rise in the gross contribution margin, reaching 10, 5%.
Speaker Change: Margin improvement was mainly attributable to higher contribution of delivery service revenues from off platform as well.
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Seckin Koseoglu: Let's move on to our APCH performance on the next slide. We recorded this point 8% APCH as a percentage of GMB in quarter one 24, with 75% improvement on a yearly rate. This was mainly through 1.2 percentage points rise in growth contribution margin, partially offered by 0.5% rise in shipping and packaging expenses.
Speaker Change: So let's move on to our EBITDA performance on the next slide.
Seckin Koseoglu: We recorded 0.8% A-B-C-A as a percentage of G-M-V in Q1-24, with 75 basis points improvement on a yearly basis. This was mainly due to a 1.2% point rise in gross contribution margin, partially offset by a 0.5% rise in shipping and packaging expenses. And now, let's look at our cash flow dynamics on the next slide. The cash generated from operations was 1.5 billion TL in Q1-24, up from 102 million TL a year ago. 778 million TL improvements in the change in networking capital year-on-year account for more than half of the increase.
Speaker Change: We recorded an 8% EBITDA as a percentage of <unk> 24, with 35 basis points improvement on a yearly basis.
Speaker Change: This was mainly through one two percentage points rise in gross contribution margin, partially offset by a 5% rise in shipping and packaging expenses.
Seckin Koseoglu: Others include 277 million TL increase in EVTA, 137 million TL increase in the change in operating monetary gains, 136 million TL increase in other non-cash items, and 26 million increase in realized fixed gains. With 426 million TL in CAPEX, our pre-cash flow was around 1 billion TL in Q1-24. Let's move on to the next slide, and let's take a look at our key takeaways. We would like to leave you with the following from today's presentation.
Seckin Koseoglu: And now let's look at our The cash generated from operations was 1.5 billion TL in quarter-124, up from 102 million TL a year ago. 778 million TL increments in the change in networking capital year on year account for more than half of the increase. Others include 277 million increase in EVTA, 127 million TL increase in the change in operating a monetary gain, 126 million TL increase in other non-cash items, and 26 million increase in realized fixed gains. With 426 million TL in capacity, our free cash flow was around 1 billion TL in quarter-1224.
Speaker Change: And now let's look at our cash flow dynamics in the next slide.
Speaker Change: The cash generated from operations was $1 5 billion TL in quarter, one 'twenty four.
Speaker Change: Me too.
Speaker Change: 2 million a year ago.
778 million improvement in the change in net working capital year on year accounts for more than half of the increase.
Speaker Change: Others include $277 million increase in EBITDA 137 million increase in the change in operating monitoring game hungrier than 36 million increase in other noncash items and 26 million increase in realized gains.
Speaker Change: We have 426 million.
Speaker Change: Our free cash flow was around 1 billion equal.
Speaker Change: In quarter, one 2024.
Seckin Koseoglu: Let's move on to the next slide, and let's take a look at our key takeaway. We would like to leave you with the following from today's presentation. Our robust supply growth in the first quarter exceeded our guidance. As justice for inflation, we recorded 42.5% GME growth on a year-on-year basis. Our growth contribution margin continues to improve by 1.2% each point and reach 10.5%. We recorded 289 million TL in EVTA, corresponding to a 0.75% rise in EVTA as a percentage of GME. With this performance, we generated a strong free cash flow of 1 billion TL. Our solid overall performance confirms our sharp focus on winning with loyalty, cultivating our sustainable differentiators, and expanding our B2B services as a turnkey e-convolution partner for merchant.
Speaker Change: Let's move on to the next slide.
Speaker Change: Let's take a look at our key takeaways.
Speaker Change: We would like to leave you with the following from today's presentation.
Seckin Koseoglu: Our robust supply growth in the first quarter exceeded our guidance. Adjusted for inflation, we recorded 42.5% GME growth on a year-on-year basis. Our growth contribution margin continues to improve by 1.2 percentage points and reached 10.5%. We recorded 289 million CL ABCA, corresponding to a 0.75% rise in ABCA as a percentage of GNB.
Speaker Change: Our robust top line growth in the first quarter exceeded our guidance.
Speaker Change: Adjusted for inflation, we recorded 42, 5% <unk> growth on a year on year basis.
Speaker Change: Our gross contribution margin continues to improve by one two percentage points and reached 10, 5%.
Speaker Change: We recorded 289, new Mcl EBITDA corresponding to endpoint 75 person right.
Speaker Change: As a percentage of G M D.
Seckin Koseoglu: With this performance, we generated a strong free cash flow of 1 billion TL. Our solid overall performance confirms our sharp focus on winning with loyalty, cultivating our sustainable differentiators, and expanding our B2B services as a turnkey e-com solution partner for merchants. As we reflect on the good start to 2024, we are committed to growing in a sustainable and profitable manner going forward. Thank you for listening. We can now open the line for questions.
With this performance, we generated strong free cash flow of $1 billion yet.
Speaker Change: Our solid overall performance confirms our sharp focus on bringing this loyalty.
Speaker Change: Cultivating our sustainable differentiator and expanding our <unk> services as a turnkey E comm solution partner for merchant.
Seckin Koseoglu: As the reflect on the good start to 2024, we are committed to growing in a sustainable and profitable manner going forward.
Speaker Change: As I reflect on the good start to 2024, we are committed to driving sustainable and profitable manner going forward.
Seckin Koseoglu: Thank you for listening.
Speaker Change: Thank you for listening we can now open the lines for questions.
Operator: We can now open the line for questions. One moment for the first question, please.
Operator: Ladies and gentlemen, at this time, we'll begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two.
Speaker Change: Ladies and gentlemen at this time, we'll begin the question and answer session and anyone who wishes to ask a question you May press star followed by one on the telephone.
Speaker Change: If you wish to remove yourself from the question queue and you May press Star two.
Operator: Those participating via the webcast, you may type your question via the live feedback box below the presentation. For those participating in the audio questions and answer session, please use your hands when asking your question for better quality. Anyone who has a question may press star 1 at this time. One moment for the first question, please. The first question comes from the land of Kulseveri Muharrem with Kona as its capital. Please go ahead.
Speaker Change: Those participating via the webcast you may top you type your question via the life Pizza box below the presentation.
Speaker Change: For those participating in the questions and answer session. Please use your handset when asking a question for better quality.
Anyone who wants a question press star one at this time.
Speaker Change: A moment for the first question please.
Unknown Executive: The first question comes from the land of Guisevere, Muharrem, with Kona Capital. Please go online. Thank you very much for the presentation. My question will be regarding the eight whole days that's moving from 3Q to 2Q in this year. What would the impact on the GME for the second quarter in your year? Thank you. The impact of the eighth holiday is actually incorporated in our quarter two guidance. We had two eighth holidays in quarter two, both of which are already incorporated in our offline guidance. I understand that, but my question is if the eighth holiday would stay in the third quarter, what would the GME growth for this quarter?
Speaker Change: Our first question comes from the line of Qsymia anymore had them with colony capital. Please go ahead.
Unknown Caller: Thank you very much for the presentation. My question will be regarding the 8-hole day that's moving from 3Q to 2Q this year. What would the impact on the GMV for the second quarter be, in your view? Thank you.
Speaker Change: Okay. Thank.
Speaker Change: Thank you very much for the presentation.
Speaker Change: My question really regarding the April day, that's moving from <unk> to second kidney disease what.
Speaker Change: On the G M B for the second quarter in your group. Thank you.
Unknown Executive: The impact of the 8th holiday is actually incorporated in our Q2 guidance. As you know, we had two 8th holidays in Q2, both of which are already incorporated in our top-line guidance.
Speaker Change: And the impact after a holiday.
Speaker Change: It is actually incorporated in our quarter two guidance.
Speaker Change: Yeah.
Speaker Change: It has the two holidays in quarter two also feature.
Speaker Change: I'd already incorporated in our topline guidance.
Unknown Executive: I understand that, but my question is, if the 8-hole day stayed in the third quarter, what would the GMV growth be for this quarter?
Speaker Change: I understand that but my question is if the a tool they would stay in the third quarter Watford GMB.
Speaker Change: Growth for this quarter.
Speaker Change: Yeah.
Unknown Executive: This typically impacts our business as during holidays, offline sales go up, and online sales are impacted. So probably, if one was in July, we would have at least a percentage or two upwards in the growth trajectory. Okay, thank you very much.
Unknown Executive: This typically impact, you know, our business during holiday. Offline sales go up and online sales are impacted. So, probably if one was, you know, in July, we would have at least a percentage or two upwards in the growth trajectory. Okay, thank you very much.
Speaker Change: This typically impact.
Speaker Change: Our business.
Speaker Change: During holidays.
Speaker Change: Offline.
Speaker Change: Sales go up and online.
Speaker Change: Online sales are impacted at all.
Speaker Change: Probably one.
Speaker Change: In July.
Speaker Change: Has.
Speaker Change: At least a percentage or two.
Speaker Change: Upward.
Speaker Change: In the growth trajectory.
Speaker Change: Okay. Thank you very much.
Speaker Change: Yeah.
Operator: As a reminder, if you would like to ask a question, please press star 1 on your telephone. Ladies and gentlemen, there are no further audio questions at this time. We will now proceed with the written questions from our webcast participants. BOOM! The first webcast question comes from Asif Sattar, who is a private investor, and I quote: "What is our market share in online retailing in Turkey? We operate in the category in the market. How is our performance versus strong competition, such as Amazon, in Turkey?" Thank you. Dear ASEP, thank you so much.
Speaker Change: Okay.
Operator: As I remind you, if you would like to ask a question, please press star one on your telephone.
Speaker Change: As a reminder, if you would like to ask a question. Please press star one on your telephone.
Unknown Executive: Ladies and gentlemen, there are no further audio questions at this time. We will now proceed with the written questions from our webcast participants.
Speaker Change: Ladies and gentlemen, there are no further audio questions. At this time, we will now proceed with the written questions from our webcast participants.
Speaker Change: Yeah.
Unknown Executive: The first webcast question comes from Marb, from Asif Sattar, who is a private investor, and I quote, what is our market share in the online retailing in Turkey? We operate in the category in the market. How is our performance versus strong competition on Amazon in Turkey? Thank you. We are at it. Thank you so much for your question. So, for Amazon, they are not publishing their results for Turkey. We will not be able to give a conclusive comment, but from the public data, like FNA active customer usage, we are seeing that they are still staying as a very small player in Turkey.
Speaker Change: The first a webcast question it comes from.
Speaker Change: For myself Sato, who's a private investor and I quote.
Myself Sato: And what is our market share in the online retailing in Turkey, we operate in that category in the market how is outperform us versus strong competition Amazon in Turkey. Thank you.
Unknown Executive: Dear Atif, thank you so much for your question. For Amazon, they are not publishing their results for Turkey. We will not be able to give a conclusive comment, but from the public data, like FNA, active customer usage, we are seeing that they are still remaining a very small player in Turkey. That's number one. Number two is how we are looking into different segments that we have a right to win in. Obviously, number one is electronics. We get GFK data in Cuba.
Speaker Change: Vietnam tankers saw much courtyard question.
Speaker Change: So for Amazon they are not publishing the resolve and.
Speaker Change: For Turkey, and we will not be able to give you a conclusive comments back from the public data like if any upscale customer usage.
Speaker Change: Being that they are still staying as a very small player in Turkey. That's number one number two is how we are looking into different segments.
Unknown Executive: That's number one. Number two is how we are looking into different segments that we have the right to win. Obviously, number one is electronic. We get GFK data in QVAM. We have significant share growth. We are over around 32% on top of this. We gain shares in all our key categories. The other data source we are looking into is Nissan for non-electronics categories. As you guys know, home and mom and baby are very critical segments for us, the needs of the females, households. We have the right to win that. We are winning share that. For home products, for the home products, we are also trying to create different data sources.
Speaker Change: We have the right to win albeit the number one is the next throw in ink.
Speaker Change: We get at GSK beta in Q1, we had significant share growth we're already at 32% on top of this we gained share in all of our key categories.
Unknown Executive: We have significant share growth. We are already around 32%. On top of this, we gain shares in all of our key categories. The other data source we look into is Nielsen for non-electronics categories. As you guys know, home and mom and baby are very critical segments for us. The needs of females, and households.
Speaker Change: Data starts to be looking for is Nissan.
Speaker Change #100: For non electronic categories as you guys small home.
Speaker Change #101: Mom and baby are very critical mass for us the needs of the female household we have rights to win that we are winning share that.
Unknown Executive: We have a right to win there. We are winning shares there. For home products, other home products, we are also triangulating different data sources, and we are seeing that we are gaining significant shares there as well. So, overall, we have a strong quarter. We are not able to share exact online shares in Turkey because it's not reported, but we are clearly beating our competitors with the share rate.
Speaker Change #101: For home products other home product, we're also triangulating different data sources.
Unknown Executive: And we are seeing that we are gaining significant shares there as well. So, overall, we have a strong quarter. We are not able to share exact online share in Turkey because it's not reported. But we are clearly beating a world competitor with the share that.
Speaker Change #102: We are seeing that we are gaining significant share that is not so overall, we had a strong quarter.
Speaker Change #102: We are not able to share exactly all I stayed in Turkey, because it smartly pasta and but we are clearly, beating our competitors at least a share of it.
Operator: The next webcast question comes from Maxim Nekrasov with Citi, and I quote, In what categories do you see higher slowdowns starting from the 2nd of October 2024? Do you see consumers trading down or decreasing frequency?
Unknown Executive: The next webcast question comes from Maximna Krasov with CT, and I quote, "In what categories do you see higher slowdown starting from 2020?" Do you see consumers trading down or decreasing frequency? Maxim, thank you so much.
Speaker Change #103: The next webcast question comes from Maxim Nekrasov with C T and I quote.
Speaker Change #104: And what categories do you see highest slowdown starting from cycling the 'twenty 'twenty four do you see consumers trading down or decreasing frequency.
Speaker Change #105: Marketing tankers, so much so that it does to all of them and we can see it starts at the critical part is in durables.
Unknown Executive: So generally, the slowdown, we can say it started. The critical part is in durables. And in durables, when you dive deeper, the number one category I would call out is computers. As you know, computers are more discretionary.
Unknown Executive: So generally the slowdown, we can't say it starts, the critical part is indurable and indurable is when you dive deeper, number one category I would call out its computer. As you know, the computer is more discretionary, and there is some deferral of the demand, delay the demand. The other one has been TV among our categories, which we are expecting some recovery with Eurocard and Olympic demands in Q3 as well. The trend we are seeing is trading down and deferral of the demand rather than a significantly decreasing frequency of online shopping.
Speaker Change #106: And even durable value dive deeper number wrong I figured I would call out his computer and.
As you know currently there is more discretionary.
Unknown Executive: And there is some deferral of the demand, delayed demand. The other one has been TV among our categories, which we are expecting some recovery with Eurocup and Olympics demands in Q3 as well. The trend we are seeing is trading down and deferral of the demand rather than significantly decreasing frequency of online shopping. Thank you, Maxim.
Speaker Change #107: And there is some deferral of the demand delayed demand. The other one has been T V. Among other categories, which we are expecting some recovery Euro Cup and Olympics demand in Q3 is that.
Yeah.
Speaker Change #107: Thing is.
Speaker Change #107: Trading at all.
Speaker Change #108: And the photo of the demand.
Speaker Change #108: Don and significantly decreasing frequency of online shopping.
Unknown Executive: Thank you, Maximna Krasov, and I quote, when do you expect to start booking tax expenses? Sure, I'll take this question.
Mark: Thank you Mark.
Unknown Executive: The next webcast question is a follow-up question from Maxim Nekrasov, and I quote, "When do you expect to start booking tax expenses?" Sure, I'll take this question.
Speaker Change #110: Our next webcast question as a follow up question from axiom to crossover and I quote.
Speaker Change #111: Do you expect to start booking tax expenses.
Unknown Executive: Sure, I'll take this question. We do not expect to pay corpus taxes in 2024, as we have tax incentives, and these are typically R&D-centered tax incentives without any time constraints. And, most likely, we will stop paying taxes in 2026.
Speaker Change #112: Sure I'll take this question.
Unknown Executive: We do not expect to pay corporate taxes in 2024, and we have tax incentives, and these are R&D tax incentives without any time constraints, and most likely we will start paying taxes in 2022.
Speaker Change #113: We do not expect to pay corporate taxes in 2024.
Speaker Change #113: The incentive.
Speaker Change #113: And these are.
Speaker Change #113: Our R&D center takes incentive without any time constraint.
Speaker Change #113: Most likely.
Speaker Change #113: The impact is.
Speaker Change #113: In 2026.
Unknown Executive: The next webcast question is again a follow-up question from Asif Sattar, who is a private investor, and I quote, what is our EBITDA margin on US GAAP basis in this quarter and what is expected EBITDA on US GAAP basis forecasted for the next quarter? Thank you.
Unknown Executive: The next webcast question is again a follow-up question from Asif Sattar, who is a private investor, and I quote, "What is our EBITDA margin on a U.S. GAAP basis in this quarter, and what is the expected EBITDA on a U.S. GAAP basis forecasted for the next quarter?"
Isaac sometimes: Our next webcast question is a follow up question from Isaac sometimes who is a private investor and I quote.
Speaker Change #115: What is our EBITA margin on U S. GAAP basis in this quarter and what is expected EBITDA on U S. GAAP basis forecasted for the next quarter. Thank you.
Unknown Executive: We do not report our financials on a U.S. gap basis.
Unknown Executive: We do not report our financials in US GAAP basis. The next webcast question is from Badar Shah Nim with a generation PMCA Corporation, and I quote, any plans to grow your services in developed markets including North America?
Speaker Change #116: We do not report our financials in the U S GAAP basis.
Unknown Executive: The next webcast question is from Badar Shammim with Generation PMCA Corporation, and I quote, Any plans to grow your services in developed markets, including North America?
Speaker Change #117: The next webcast question is from Darshan him as a member with a generation P. M. C Corp, and I quote any plans to grow your services in developed markets, including North America.
Unknown Executive: We do not have plans to move to Badar to expand the border in North America. Having said that, Turkish collection is very, very popular in different parts of the world. We started doing some steps with integrations to other markets places to do facilitate micro exports from Turkey. So if you go to whole markets today, you can see our private label June already being sold in those stores, and we will continue to expand our cross-border services with smart integrations versus large investments for this new market.
Unknown Executive: We don't have plans at the moment, Badar, to expand Hepsiburada and launch it in North America. Having said that, Turkish collections are very, very popular in different parts of the world. We started doing some tests with integrations into other marketplaces to facilitate micro exports from Turkey. So, if you go to Walmart today, you can see our private label June already being sold in those stores. And we will continue to expand our cross-border services with smart integrations versus large investments in this new market.
Speaker Change #118: We don't have plans at the moment product will expand tapes.
Speaker Change #118: Launching in North America, having said that Turkish collections.
Speaker Change #118: They are very popular in different parts of the Earth.
Speaker Change #118: We started doing some tests this integration to other marketplaces to door facilitates my bright spots from Turkey, and so if you go to hallmarks of bank you can see other private label doing already being sold.
Speaker Change #118: In those stores and we will continue to expand our cross border services.
Speaker Change #118: The integration, there's a large investment but this new market.
Unknown Executive: The next webcast question is a follow-up question from Asif Sattar, and I quote, "What is the expected incremental GMV increase due to the Jumian partnership this year?"
Unknown Executive: The next webcast question is the follow-up question from Asif Sattar, and I quote, "What is the expected incremental GMV increase due to junior partnership in this year?" Thank you. Look at it. We are very, very excited about junior partnership. First, let me tell that Mina is the region for Turkish collections. We are winning in the home category in Turkey. Small domestic appliances that are exportable and Junior has been a huge potential in building this partnership with us. We are still in the building stage. I am expecting most of the intake to come starting to come next year at this because we are entering, fulfilled by junior.
Speaker Change #119: The next question is a follow up question from my side.
Speaker Change #120: And I quote or what is the expected incremental G. M. B increased Youtube Julianna partnership in this year. Thank you.
Unknown Executive: Look, Asif, we are very, very excited about the JUMIA partnership. First, let me tell you that MENA is the region for Turkish collections. We are winning in the home category in Turkey, with small domestic appliances that are exportable.
Speaker Change #121: Look I think we are.
Speaker Change #122: Anxiety about Jimmy a partnership first let me tell me.
Speaker Change #123: The region for Turkish coordination, we are winning in the home category in Turkey, and small domestic export.
Speaker Change #123: So that's an exportable and you Mir has been a huge part timeshare in building this partnership with Tot.
Unknown Executive: And JUMIA has been a huge potential in building this partnership with us. We are still in the building phase. I am expecting most of the impact to come, starting to come next year, Asif. Because we are entering, fulfilled by JUMIA. So we are doing the first shipment. It will take some time for this product to be inbound. We are selecting very, very cost-efficient ones, better to win in JUMIA and with relevant customers. Nothing significant this year, but definitely watch this phase for improvement next year as we complete our integration and leverage their existing traffic from different partners.
Speaker Change #123: We are still in the building space I am expecting most of the impact to call out.
Speaker Change #124: It's starting to come next year because of the ours.
Anthony fulfilled by Jim Young So we are doing the first chip months. It will take some time for this product to the inbound we are connecting via innovative cost efficient basis to.
Unknown Executive: So we are doing the first shipment. It will take some time for this product to be in bomb. We are selecting very, very cost efficient method to win in junior and with relevant customers. So nothing significant this year, but definitely watch this space for improvements next year as we complete our integration and leverage their existing traffic of different parts.
Speaker Change #124: <unk> named Jim Young and relevant customer saw nothing significant this year.
Speaker Change #124: We need to watch this space for improvement next year, as we complete our integration and leverage existing traffic of a different answer.
Speaker Change #124: Yeah.
Unknown Executive: The next webcast question comes from Grant Felgenhauer, who's a private investor and a quote. Are you considering a local equity listing in Turkey? Thank you. So, we recognize...
Unknown Executive: The next to webcast question comes from Grant Felgenhow, who is a private investor, and that quote. Are you considering a local equity listing in Turkey? Thank you.
Speaker Change #125: The next to webcast question it comes from grandfathered and Hal Who's a private investor and I quote.
Speaker Change #126: Are you considering a local equity listing in Turkey. Thank you.
Unknown Executive: So we recognize the potential benefits that a dual listing could bring very well, and we are actively exploring where are your options to determine the best code of actions for our stakeholder. As part of this process, we are evaluating market's condition as when is regulatory requirements involved in a dual listing.
Unknown Executive: So, we recognize the potential benefits that a dual listing could bring very well, and we are actively exploring various options to determine the best course of action for our stakeholders. As part of this process, we are evaluating market conditions as well as regulatory requirements involved in a dual listing. At this point, we haven't made a concrete decision regarding a potential listing in Bursa, Istanbul. But we will keep the market informed as we progress and make any definitive decisions. In the meantime, we appreciate your continued support.
Speaker Change #127: So D recognized the potential benefits that it do this thing called to bring that about and we are actively exploring options.
Speaker Change #127: Options to determine the best course of action for our stakeholders.
Part of this process, we are evaluating market conditions and then.
Speaker Change #127: There are requirements in more than a deal and I think at this point, we haven't made a concrete decision regarding a potential listing in borsa Istanbul.
Unknown Executive: At this point, we haven't made a concrete decision regarding a potential listing in both the Istanbul, but we will keep the market informed as we progress and make any definitive decision. In the meantime, we appreciate your continued support.
Speaker Change #127: We'll keep the market informed as we progress.
Speaker Change #128: Any definitive decision in the meantime, we appreciate your continued support.
Unknown Executive: The next webcast question comes from Sinan Chin with Amber Road Investors, and I quote, "What drives management's confidence that it will continue to grow its market share as global cross-border e-commerce platforms consider entering the Turkish market?" Thank you, Sina.
Unknown Executive: The next webcast question comes from Sinan Chin with a very road investors, and I quote, what drives management's confidence that it will continue to grow share as global cross-border e-commerce platforms consider entering Turkey's market. Thank you. Thank you, Sinan. I think there are a couple of things that give us confidence that we will sustain and continue to grow share despite global cross-border platforms. Number one, Turkey has a very, very competitive supplier base. As you look into this global cross-border success stories, absolutely they have strong playbooks, but they don't have competition like Turkish fashion and home, very, very economical.
Speaker Change #129: The next webcast question. It comes from Sinan Chin with Amber Road investors and I quote what drives our management's confidence that it will continue to grow share as globe Global Cross border e-commerce platforms consider to enter into Turkey smart.
Speaker Change #129: Thank you.
Unknown Executive: Thank you, Sinan. I think there are a couple of things that give us confidence that we will sustain and continue to grow shares despite global cross-border platforms. Number one, Turkey has a very, very competitive supplier base. As you look into these global cross-border success stories, Absolutely, they have strong playbooks, but they don't have competition like Turkish fashion and home. Very, very economical.
Sundar: Thank you Sundar I think there are a couple of things that gives us confidence.
Speaker Change #131: The those prostate and colon cancer grow share despite global cross border for smaller mom, Turkey has that been innovative competitive supplier base.
Speaker Change #132: It is you who came to this global cross border.
Speaker Change #131: Great.
Speaker Change #133: Absolutely they had strong playbooks, but they don't have competition like Turkish fashion and home.
Speaker Change #134: They are economical.
Unknown Executive: Second, affordability is a critical solution for Turkey. We are the only online company that has the payment license and can do installment in categories like cosmetics, FMCG, and mobile phone. Third, quality matters a lot.
Unknown Executive: Second, affordability is a critical solution for Turkey. We are the only online company, which has the payment license, which can ruin so many categories like cosmetics, etc., mobile phone, third, quality material. In Turkey, this is still number one, 30% tax driver for Turkish online shopping, and as you know, we are dealing with all over quality metrics.
Speaker Change #133:
Speaker Change #133: Affordability is critical solution for Turkey, we are the only online com.
Speaker Change #133: The payments lifestyles, which candidly install hunting categories like cosmetics.
Speaker Change #135: C G mobile phone.
Speaker Change #135: Quality tomato set off.
Unknown Executive: In Turkey, this is still the number one purchasing time driver for Turkish online shopping. And, as you know, we are winning with all our quality metrics. We are the year over year MPS champion in Turkey. So, we are up for competition. We appreciate the new entrance that will continue to raise the bar for Turkish customers. We have strong rights to it. And finally, we are also building cross-border capabilities, which is helping us. So, we just launched our first product in a test environment in Namche. We signed a partnership with Jumia to build some business together. So, we will also grow our cross-border business as we grow our Turkish business as well.
Speaker Change #135: In Turkey.
Speaker Change #136: This is still a number of long purchasing tons driver for Turkish online shopping and we are winning with all of our quality metrics. We are you know where to your M. P. S champion in Turkey.
Unknown Executive: We are year-over-year MPH champion in Turkey, so we are up for competition. We appreciate the new entrance that will continue to raise the bar for Turkish customers. We have strong rights for it. And finally, we are also building cross-border capabilities, which is passing us, so we just launched our first product in a test environment in Namshayk. This time, some partnerships with Jumya to build some business together, so we will also grow our cross-border business as we grow over Turkish business as well.
Speaker Change #137: And we are all for competition. We appreciate the new entrants that will cause you to raise the bar for Turkish costumer.
Speaker Change #137: We had strong God forbid and finally.
Speaker Change #137: We are also building cross border capability and this is passing gast saw the jobs launched at our first.
Speaker Change #137: Pearl Docs in a test environment in Nam Chick vs time partnership with Xiaomi on for Bill.
Speaker Change #137: There's enough together so they are also growing our cross border business is weak.
Speaker Change #138: All of our Turkish business as well.
Unknown Executive: The next webcast question is from James Hayes with Lucerne Global Capital, and it's a series of questions, and I quote: Thank you all for doing the call. Can you please provide an update on the various regulatory initiatives which may constrain the activities of your larger competitor in the market? The second question is, which are the items which have only just kicked in, and are there any additional regulations to take effect later this year? The third and final question is, finally, the free cash flow in the quarter was...
Unknown Executive: The next webcast question is from James Hayes with LeCirna Global Capital, and it's a series of questions. And I quote, Thank you all for doing the call. Can you please provide an update on the various regulatory initiatives which may constrain the activities of the larger competitor in the market? Second question is, which are the items which have only kicked in the early 2025? And are there any additional regulations to take effect later this year?
Speaker Change #139: The next webcast question is from James Hayes, with Lucerne Global capital and it's a series of questions and I quote.
Speaker Change #140: Thank you all for doing the call can you. Please provide an update on the various regulatory initiatives, which may constrain the activities of the larger competitors in the market.
Unknown Executive: that will constrain the activities of the larger competitors in Turkey on multiple things.
Speaker Change #140: Second question is which are the items, which have only kicked in at least 2025.
Speaker Change #140: And are there any additional regulations to take effect later this year.
Unknown Executive: Third and final question is, finally, the free cash flow in the quarter was quite impressive. Can you provide any medium-term thoughts around free cash flow generation capacity or for the full year of 2024? Thank you. Thank you, James. Very good question. So, to run the 75, there will be various regulatory initiatives that will constrain the activities of the larger competitor in Turkey. Multiple things, number one is license fee is kicking in Turkey. So, for the largest online players, which has this proportion of shares, there will be significant amounts of payment to make as a license fee for the government.
Speaker Change #140: Third and final question is finally, the free cash flow in the quarter was quite impressive can you provide any medium term thoughts around free cash flow generation capacity or for the full year of 2024. Thank you.
James Hayes: Thank you James.
Speaker Change #142: Very good question. So 275 that will be valued today do not carry any state and that will constrain the activity of the larger competitors in Turkey.
Speaker Change #143: Multiple things number one is license fee is kicking in in Turkey.
Unknown Executive: Number one is that license fees are kicking in in Turkey. So, for the largest online players, which have disproportionate shares, there will be a significant amount of payment to make as license fees to the government. The secondary is, as you know, private label, which was a stronghold of Alibaba in Turkey, is banned. We are expecting that there will be continued impact as of 2075. The continued impact of advertising promotion reduction will also have an impact. So, these are the three, I would say, that with a much more democratic environment in Turkey, that is supporting small, medium-sized enterprises.
Speaker Change #144: So for the large larger online players.
Speaker Change #145: Disproportionate share that will be significant.
Speaker Change #148: <unk> payments to make as license fee for the government.
Unknown Executive: The secondary is, as you know, private labor, which was a strong call to Alibaba in Turkey, is banned. We are expecting that that will be continued impacts as all 35. The continued impacts of advertising promotion reduction will also have an impact. So, these are the three. I would say that we say much more democratic environment in Turkey. This is supporting small medium size enterprises could continue to make an impact on the large competitors in the market.
Speaker Change #145: And the secondary is as you know private labor, which was the strong called off.
Speaker Change #146: <unk> sorry.
Speaker Change #147: Is bad.
Speaker Change #147: <unk> think there'll be continued impact as a time to buy.
Speaker Change #147: It's gone really impactful advertising promotion reduction they'll also have an impact. So these are the three I would say that we see.
Speaker Change #149: Much more democratic environment in Turkey. This is supporting small and medium sized enterprises are of course.
Speaker Change #150: Volunteers to make an impact on the large competitor in the market and for your case related questions I will now turn the floor to attach game.
Unknown Executive: And for your case-related questions, I want to turn the floor to Touch again. Thank you so much for the question. As you know, there are two components for the free cash flow generation. One is a BTA, and the other one is networking capital management. We will continue to grow our BTA year-over-year on the two-year basis as well. So, definitely we will be improving on the key pillars of the cash flow for the full year. On the networking capital side, what I can say is that as the higher interest rates and the government action to minimize the inflation has started to take a bigger impact in the market.
Speaker Change #151: Thank you so much for the question.
Speaker Change #151: There are two components.
Unknown Executive: One is EBCA, and the other one is networking capital management. We will continue to grow our EBCA business year over year on a two-year basis as well. So definitely, we will be improving on the key pillars of the cash flow for the next two years. On the networking capital side, what I can say is that higher interest rates and government actions to minimize inflation have started to have a bigger impact in the market.
Speaker Change #152: Free cash flow generation, one is EBITDA and the other one is networking capital management.
attach game: We will continue to grow our EBITDA year over year on a full year basis as well.
attach game: Definitely.
Speaker Change #154: We will be improving on this key pillars.
Speaker Change #154: Free cash flow for the full year or the network the networking.
Speaker Change #154: Yeah.
Speaker Change #154: Working capital side.
Speaker Change #155: What I can say that.
Speaker Change #155: The higher interest rates and the government actions.
Speaker Change #156: Minimized the inflation.
Speaker Change #156: As of today.
Speaker Change #156: The impact in the market.
Unknown Executive: All companies will be looking into their working capital requirements with increased focus, but we will always continue to be a negative networking capital business. So as our business continues to grow in the top line, this will also be the second layer and the key pillar to increase our pre-cash flow. Therefore, there can be some seasonality impact from one quarter to another. But on a two-year basis, we will continue to improve our pre-cash flow position in 2024.
Unknown Executive: You know, all companies will be looking into their networking capital requirements with increased focus. But we will always continue to be a negative networking capital business. So, as our business continues to grow in the top line, this will also be the second layer and the key pillars to increase our free cash flow. So, that can be some; it is another key impact from one quarter to another. But on a four-year basis, we will continue to improve our free cash flow provision in 2024.
Speaker Change #156: All companies will be looking into the working capital requirements.
Speaker Change #156: Increased focus.
Speaker Change #157: But we will always continue to be a negative net working capital.
Speaker Change #157: Business, so as our business continues to grow in the top line.
This will also be second layers.
Speaker Change #158: And then keep them to increase our free cash flow so.
Speaker Change #158: That can be some seasonality impact from <unk>.
Speaker Change #159: One quarter, two and others.
Speaker Change #159: On a full year basis, we will continue.
Speaker Change #159: Continuing to improve our free cash flow position in 2024.
Speaker Change #159: Yes.
Operator: Ladies and gentlemen, the conference is now completed, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.
Operator: Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone.
Speaker Change #160: Ladies and gentlemen, the conference has now concluded and you may disconnect. Your telephone. Thank you for calling and have a good afternoon.
Speaker Change #160: Okay.
Speaker Change #160: [music].
Unknown Producer: [inaudible] Produced by Hanzade Kilickiran, Halil Oz, Helin Celikbilek, Nilhan Gokcetekin, Seckin Koseoglu, D-Market Electro Produced by Hanzade Kilickiran, Halil Oz, Helin Celikbilek, Nilhan Gokcetekin, Seckin Koseoglu, D-Market Electro