Presentation

Operator

Ladies and gentlemen, thank you for standing by. I'm Vasilios your chorus call operator. Welcome and thank you for joining the Hepsiburada conference call and the live webcast to present and discuss the 4th quarter and full year 2024 final results.
All participants will be in a listen-only mode and the conference is being recorded. The presentation. Should anyone need assistance during the conference call, you may signal an operator by pressing the telephone. At this time, I would like to turn the conference over to Ms. Nilhan Olaan, Gyutskasekin, CEO, Mr. Sachin Kuseoglu, CFO, Ms. Terence Tuzhou, investor relations director, Ms. Tuzhou, you may now proceed.

Thanks operators.
Thank you very much for joining us today for Hepsiburada 4th quarter and full year 2024 earnings call. I'm pleased to be joined on the call today by our CEO Nilhan Olaan, Gyutskasekin and our CFO Sachin Kuseoglu. The following discussions reflect 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. Actual results may differ materially from these forward-looking statements. Please refer to today's earnings relief as well as the risk factors described in the safe harbor slides of today's supplemental slide deck today's press release, the 6K.
Our form 20F filed with the SEC on April 30, 2025, and other SEC filings for information factors that could cause our actual results to differ materially from these forward-looking statements. Also, we will reference certain non-IFS 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 IFS measure and the relevant IFS to non-IFS reconciliation. As a reminder, a reply to this call will be available on our investor relations website. With that, I hand over to our CEO, Nilhan Olaan, Gyutskasekin.

Thank you, Terence. Welcome, everyone, and thank you for joining us. I'm delighted to be with you today to present our 4th quarter and full year results. We concluded 74 with growth in marginal expansion through diligent execution of our fundamentals, notably, we delivered a real GMV growth of 12.1% in 2024 and we also achieved growth contribution margin at 11.3% with a 2.1%-point improvement on a yearly basis in 24. Our EBITDA, as percentage of GMV, continued its expansion, reaching 1.1% with a 0.7%-point rise year on year. On an unadjusted inflation basis, our GMV grew 74% year on year, and EBITDA percentage of GMV reached 2.1%. Now, I'd like to go into the performance of our operational metrics during the year.
Our customers and merchants are always at the core of our ecosystem, and we work hard to improve our value proposition for that. In line with our customer centric approach, we improved our reliability, speed, and convenience of our logistics services as well as payment convenience with our diverse landing solution. Our active customers grew by 235,000 to 12.2 million. Our orders have shown 16% points year on year growth, resulting in 131.4 million orders, and our order frequency over the last 12 months reached 10.8%, up by 14%.
On merchant side, they enhanced our logistics, to manhandling, fintech, and advertising solutions with an active merchant base of over 100,000, we continue to onboard additional brands, particularly in the life cycle categories. Let me now elaborate on our achievements in that report. In line with our profitable growth strategy, we remained focused on three priorities customer loyalty, cultivating the sustainable differentiators, HeftyJet and HeftyPay, and finally expanding our B2B services to Ofpi platform as a turnkey e-com solution partner for merchants.
In early 2024, we set clear targets for each of these strategic priorities, and now I am pleased to share the progress we make throughout the year. First, our loyalty program, Hexo Product Premium. The program continues to register, increased customer loyalty, reaching 3.7 million members enhancing the program offerings, we signed a partnership with Warner Bros. Discovery in 2024, and content provided as part of premium program benefits has widely expanded. Our next strategic priority has been our delivery services. Central to achieve this, it has widened penetration within our merchant base, whereby it delivered 72% of total parcels dispatched during the year. Hexige confirms its commitment to differentiation through service excellence, confirming its integral role in our delivery ecosystem.
Next slide please.
Now let's move on to our next strategic priority which is capitalizing on our differentiation through landing solutions. Our lending solutions include in-house buy now pay later, in-house consumer finance loans, shopping loans from partner banks, and general-purpose loans from our partner banks. Over the last several months, our total lending volume reached TRY16.2 billion, which is 2.6 times the total volume in 2023. Overall, our BMPI consumer finance loans and shopping loans were utilized in over 3.3 million orders since they are launched.
Next slide please.
Our fourth key priority is offering strong capabilities to our merchants. Let me start with HeftyJet. With over 40 million parcels delivered in 2024, HeftyJet increased its off-platform volume by 89% year on year. Accordingly, 4, its off-platform share rose by 9.7%-points on year to nearly 34.6% of its total volume. Next, I would like to talk about HeftyPay's one clinic checkout solution pay with HeftyPay. We continue to expand its convenient solution to other retailers and all our merchants. HeftyPay is now integrated with 140 key accounts by the end of 2024. For all of our strategic priorities, solid progress in our KPIs throughout the years reflects the dedicated performance of and strong execution by an entire. Let me say a few words in early 2025.
Start of 2025 was very challenging due to ongoing macroeconomic headwinds pressuring purchasing power of our consumers, as well as boycotts against shopping starting March. Our marketing activities were also limited in all performance channels due to political sensitivity and the level of boycott in the first quarter of the year. However, we also had a very positive milestone for 5 years. On January 29th, the closing of the transaction between and our founder, the members of family, to purchase a 65.4% controlling stake in Efseborazawa Dena.
We are extremely excited about the potential value creation opportunities that arise from this deal. It is the preeminent payment, marketplace, and fintech ecosystem in Kazakhstan. With this, I thank you for listening and leave the floor for Tetchkin, our CFO to provide further insights into our financial platforms.

Thank you, Nilhan, and welcome everyone. I'm delighted to be with you today to present our 4th quarter and full year results. On an unadjusted for inflation basis, our GMV grew by 49.4%, close to our guidance of 50% to 55%. And our EBITDA as a percentage of GMV reached 1.8% in line with our guidance of 1.8 to 2% in the fourth quarter. Adjusted for inflation, our GMV rose by 12.1% in 2024 compared to full year 2023.
On the profitability side, our gross contribution margin rose to 11.3% with a 2.1%-point improvement compared to last year. Our EBITDA as a percentage of GMV rose to 1.1% for the full year. This is a 0.7%-point rise year on year. Let's go over the details of this performance. In 2024, 12.1% of real GMV growth came through 131.4 million orders and a higher average order value. Excluding our digital products, our order growth was at around 8% in 2024 compared to the previous year. Average order value growth of around 4% due to a faster than inflation rise in the average selling price.
During 2024, we saw a 2.9%-point shift towards our marketplace operations compared to 2023, and our 3P operations corresponded to around 70% of our business. This shift came as a result of a 2.9%-point shift towards non-electronics, which is in line with our broader strategy. Let's have a look at our revenue and gross contribution dynamics.
First, some color on revenues. Our revenue grew by 6.4% in quarter fall, bringing our revenue growth for the full year to 11.1% compared to the same period of last year. Our revenue growth in quarter 4 was mainly due to a 15th percentage rise in 3P revenue, 18% increase in delivery service revenue, and 127% increase in other revenue. These were partially offset by the 1.6% decrease in our 1-year revenue as a result of the shift in GMV towards 3P compared to quarter 4 2023. Our revenue growth in 2024 was mainly due to the 50% increase in delivery revenue and the 112% increase in other revenue, including our advertising services revenues and hips broad premium subscription revenues. 12% revenue growth in marketplace operations also contributed to our overall revenue growth in 2024.
The gross contribution margin improved by 2.1% points to 11.3% in 2024 compared to last year. This marginal improvement was mainly attributable to increased delivery service revenue, higher other revenue, including ads and premium subscription revenue, together with an increase in the 1P margin.
Let's move on to our EBITDA performance on the next slide. We recorded 1.1% EBITDA as the percentage of GMV in 2024, with a 0.7%-point yearly improvement. Excluding the one-off items in 2023, year on year improvement in ABTA was at 0.9% points for the full year 2024. This 0.7% improvement was driven by a 2.1% rise in gross contribution margin, partially offset by 0.5% rise in payroll and outsourced staff expenses. 0.4% rise in shipping and packaging expenses, 0.2% rise in advertising expenses, and 0.3% rise in other operating expenses. The rise in payroll and outsourced staff expenses came from the annual and mid-year salary rises along with the rise in employee number for our subsidiary.
The increase in shipping and packaging expenses as a percentage of GMV was mainly driven by a higher parcel volume and the rise in delivery fees per unit combined with annual minimum wage increases. The increase in other operating expenses was mainly due to the recognition of provision for the license fee amounting to TRY180 million and higher bed debt provisions in 2024.
Next, let's have a look at our cash flow dynamics.
For full year 2024, pre cash flow decreased by TRY1.9 billion compared to a year ago. This decrease was mainly due to a TRY1.55 billion decrease in net cash provided by operating activities and TRY0.34 billion increase in CapEx. With TRY2 billion in CapEx, our free cash flow was at TRY3.7 billion for the full year 2024.
With this, I will now hand over to Nilhan for the key takeaways.

We leave you with the following key takeaway from today's presentation. For the year 2024, we recorded real double digit GMV growth of 12.1%, supported by 2.1%-point rising growth contribution, our EBITDA reached TRY2.1 billion corresponding to 1.1% of GMV in 2024.
On Q1, we had two important developments. On one side, the year started with macroeconomic headwinds, pressuring the purchasing power of consumers, and boycott started against shopping. On the other, which is positive side, an important milestone in the company's history took place on 29 January. Under CASTIO ownership, we are excited about the opportunities we foresee going forward. With this, I would like to thank you all for listening up.
Today, we don't have a Q&A, but we are much looking forward to connecting with you and your questions. Please direct them to our investor relations.
Thank you.

Operator

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