Ladies and gentlemen, thank you for standing by. I am Gailey, your chorus call operator. Welcome, and thank you for joining the Hepsiburada conference call and live webcast to present and discuss the third quarter 2024 financial results. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question-and-answer session. [Operator Instructions] 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. Mr. Celikbilek, you may now proceed.

Thanks, Gailey. Thank you for joining us today for Hepsiburada's third quarter 2024 earnings call. I am 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's views as of today's date only. 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. 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, today's press release, the 6-K, our Form 20-F filed with the SEC on April 30, 2024, and other SEC filings for information on 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's call. 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 to non-IFRS reconciliations. As a reminder, a replay of this call will be available on our investor relations website. With that, I'd like to hand the call over to our CEO, Nilhan.

Thank you, Helin. Welcome, everyone, and thank you for joining us. I'm delighted to be with you today to present our third quarter results. First, we are very proud to share a significant milestone in our journey. This quarter marks the first time we achieved quarterly positive operating income since our IPO in our IFRS financials. This accomplishment reflects the strength of our strategy, disciplined execution and the dedication of our team. Now, let's dive into the details behind this transformative moment. We have successfully concluded another challenging quarter facing the continued macroeconomic pressures and curb purchasing power. Mostly, we delivered our GMV growth and EBITDA as a percentage of GMV guidance in the third quarter. Diligent execution during the back-to-school shopping period and the celebratory campaign for the second anniversary of our loyalty program contributed to overall year-on-year GMV growth during Q3. On a 10.3% in the third quarter, we delivered 17.4% GMV growth in the first nine months compared to the same period last year, adjusted for inflation. On the profitability side, our gross contribution margin rose to 11.3% in the first nine months, with a 1.9 percentage point improvement compared to same period last year. Our EBITDA as a percentage of GMV continued its rise, reaching 1% in the first nine months of the year adjusted for inflation. Overall, we are very pleased to have demonstrated continued sustainable growth and improved profitability in the third quarter. Let me now go into our performance during the quarter as well. Let's look at a few of our operational metrics. Our active customers grew by 233,000 customers to 12.3 million. Meanwhile, we are glad to see growing interest in our phenomenal loyalty program, which has scaled to nearly 3.7 million members by November. As Turkey's most recommended e-commerce brand, we…

Thank you, Nilhan, and welcome everyone. I'm delighted to be with you today to present our third quarter results. Despite the ongoing microeconomic challenges, I'm pleased to report that we maintained a strong upward trend across all key metrics in our third quarter and nine-month results. With 10.3% GMV growth in the third quarter, our GMV rose 17.4% in the first nine months compared to the same period of last year. On the profitability side, the gross contribution margin rose to 11.3% in the first nine months with a 1.9 percentage point improvement compared to the same period of last year. Our EBITDA as a percentage of GMV continued its rise, reaching 1.2% in quarter three, and 1% in the first nine months of the year. Let's go over the details of this performance. In the third quarter, GMV growth came mainly through solid order growth and higher AOV when digital products are excluded. Fashion and lifestyle, appliances and mobile phones are the top three categories of growth. We achieved a gross contribution margin of 11.5% in Q3 2024, while our third-party logistics business was a key driver. This expansion was also supported by an easing inflationary impact on our cost of inventory sold in retail operations compared to the same period of last year. In quarter three, we reached a milestone with positive operating income EBIT of TRY32 million in the first since our IPO. Our EBITDA as a percentage of GMV continued its rise to reach 1.2%. This is a 1.3 percentage point rise year-on-year when excluding the one-off contribution from Turk Commerce towards the settlement of class action lawsuits in Q3 2023. Let's move on to the next slide to see our GMV breakdown. In quarter three, around 10% of real GMV growth came through 32 million…

[Operator Instructions] There are no audio questions at this time. I will now pass the floor to Ms. Celikbilek to read written questions. Thank you.

Thank you, Gailey. One question is on our expectations for 2025. How do you think about macro landscape and your immunity to potentially shrinking demand in Turkey?

So first of all, Helin, we should remind that Turkey is a very high potential country for e-commerce, large population with 80 million, half of them is under 24 years old, high mobility and with large interest to e-commerce. So we believe in long-term potential of the market. Next six to nine months, there will be shrinking in demand for discretionary products following the much more orthodox policy from the government. We think this is beneficial for long term in Turkey, not in short term. We have significant building blocks to really run it through this period in a healthy way. One, Hepsiburada low prices offer a great value for customers during macroeconomic challenges. Second, we have the widest options for lending services, which means that consumers in the time they need affordability, they'll get more and more. The third, our premium offers -- premium loyalty program offers a great service level for customers. So in a nutshell, yes, next six to nine months, is going to demand certain immunity from the retailers, players, but Hepsiburada, with its 75-year experience in Turkey, has seen tough times and better times, and we are ready to ride it through this period.

Thank you, Nilhan. Another question is about our loyalty program. The question asks about our long-term targets with regards to the program and its growth potential.

Perfect. So, Hepsiburada Premium program is very critical for future of Hepsiburada. Once a consumer enters this program, thanks to its amazing value proposition with free cargo, free return from your door, 3% cashback and with Warner Bros package included, and this offers great service. Consumers, when they entered this program, their frequency is increasing by 30%. And we have been, in two years, just we exceeded our two-year mark, we already reached 3.7 million. When you look into very developed e-commerce marketplaces like Allegro, Mercado, we see that almost half of their active customers is now part of their loyalty program after a decade. Hence, we should definitely aspire ourselves to get at is half of our customers. That would be our long-term objective. But the key thing is sustaining an amazing value for customers, retaining very strong NPS, keeping premium as a growth flywheel for Hepsiburada Group.

All right. Thank you for that. We have another question coming up. Gailey, will you be reading the question, please?

Yes, of course. So we have, from our webcast participant [indiscernible], can you share data on volume of transactions on Hepsi wallet and take rate on the same? Do you want me to read the rest as well?

No, we'll answer this one.

Okay, thank you.

The current transaction volume going over the wallet is basically predominantly our e-commerce volume. So based on our 30-plus-million orders over the quarters, around 85% of this volume is going towards -- through the wallet.

Thank you. The next question is from the line of [indiscernible]. Could you please clarify the 1.2% EBITDA in Q3 actually compared to 2.2% guided in September?

The difference is basically the adjusted and unadjusted numbers. We are giving guidance on unadjusted EBITDA and growth. So in terms of unadjusted EBITDA, our result is in line with the guidance that we have provided, and 1.2% is in line with the adjusted numbers in our financials.

Thank you. And the next question is from our webcast participant, [indiscernible]. Why is there no increase in active merchants for the past eight quarters in a row?

I can answer this question. So with our active merchants, we actually -- we are covering most of the high potential hero merchants in Turkey. And our success with these merchants is quite adamant in our selection results, which is increasing every quarter. So we are looking for quality of the merchants over quantity. We want to work with high potential merchants that will be active, that will delight our consumers. And we believe that over time, our active merchant base will also increase. But for now, we have been working on monetizing this merchant base with high retention, serving them with our logistics services, bringing them to our successful one-click execution as well. Last quarter, I want to give some light to our active merchant numbers, why they didn't increase. So Turkish government created the new two-factor authentication and verification mechanism. Without it, we would have seen a different number. But with this new higher bar, which was quite safe for higher security of the transactions, we have seen hold things up.

Thank you. And another question is from [indiscernible] with Digiterra. Do you think the collaboration with BluTV will be affected by Kaspi's acquisition?

So our BluTV collaboration is a very strategic and important one. As you know, recently, BluTV is acquired by Warner Bros., and we made a five-year deal with them -- exclusive deal with them in Turkey. We don't expect any negative impact deterioration. And actually, BluTV just announced transition to make this amazing content next year, and they also highlighted their partnership in this press release, and they are delighted with Hepsiburada Premium product, how it helps to acquire new customers through their [indiscernible] as well. So we are quite excited about the next transition, and we think we will continue to have the strong collaboration in the coming five years as well.

Thank you. And the next question is from the line of -- from our webcast participant, Frederick Kotek with SGCM. What are your plans to insource your fintech segment through the help of Kaspi as in stop securitizing or outsourcing to banks?

Sorry, I want to clarify what the insource means.

Let's move on to the next question while the…

Frederick answers that. Yeah.

Okay, thank you. And the next question is from [indiscernible]. The cash outflow from early collection of credit card receivables is higher than EBITDA. When do you expect EBITDA CC commissions to turn positive?

Thanks a lot for this question. Actually, as you can see, we are improving our EBITDA quarter-over-quarter. And the interest rate has increased versus last year significantly, and the credit card costs have gone up as well. But going forward, as the overall interest rates in the country are going to be decreasing gradually in line with the inflation, we will continue to increase our profitability. So this data will close, and we will definitely be having a positive EBITDA minus credit card costs in the next year.

Thank you. And from [indiscernible], what is the take rate of underlying interest rate on BNPL loans?

The BNPL loans have different annualized interest rates, depending on the number of installments. So it ranges from 80% to above 100%. But on average, we can quote around 95%, including tax.

Thank you.

I think I got the gist of the question now from Frederick as well. So first of all, our BNPL and Hepsiburada finance loan solution is done through our own P&L. This is half of our outstanding loans. And the other half which is constituted by shopping loans and GPS is coming from banks. Our current strategy is continue offering our customers this widest spectrum of services, where we will continue with general purpose loans, which we will delight them with multiple banks. It's the marketplace getting the best rate as much as we continue frictionless very strong BNPL and Hepsipay finance loan proposition. So far, this is our strategy. We don't plan any change. And obviously, if we would have new news to share with you, we would share it in the following call.

Thank you. [Operator Instructions] Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

We want to thank you so much for listening and trusting Hepsiburada. We are excited about our future. And in case we don't talk before, we would like to wish you all a Merry Christmas and Happy New Year. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.