First Quarter 2021 Financial and Operational Highlights
(in millions of RUB(1) and USD(2)) | Three months ended | Three months ended | Change(3) | Three months ended | |||
RUB | RUB | USD(4) | |||||
Revenue | 2,841 | 1,990 | 42.7% | 37.5 | |||
Russia Segments(6) Revenue | 2,662 | 1,838 | 44.8% | 35.2 | |||
Net Income | 930 | 412 | 126.0% | 12.3 | |||
Net Income Margin, % | 32.7% | 20.7% | 12.1 ppts | ||||
Adjusted EBITDA(5)(7) | 1,342 | 970 | 38.4% | 17.7 | |||
Adjusted EBITDA Margin, %(5)(7) | 47.2% | 48.7% | (1.5) ppts | ||||
Adjusted Net Income(5)(7) | 850 | 581 | 46.2% | 11.2 | |||
Adjusted Net Income Margin, %(5)(7) | 29.9% | 29.2% | 0.7 ppts |
(1) “RUB” or “₽” denote Russian Ruble throughout this release.
(2) “USD” or “$” denote
(3) Percentage movements and certain other figures in this release may not recalculate exactly due to rounding. This is because percentages and/or figures contained herein are calculated based on actual numbers and not the rounded numbers presented.
(5) Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Margin are non-IFRS measures. See “Use of Non-IFRS Financial Measures” elsewhere in this release for a description of these measures and a reconciliation from the nearest IFRS measure.
(6) Includes our “Russia (hh.ru)” and “Russia (Zarplata.ru)” operating segments revenue.
(7) Beginning from the first quarter of 2021, we modified the presentation of Adjusted EBITDA and Adjusted Net Income, our non-IFRS measures, to exclude the impact of foreign exchange gains and losses. Prior period amounts have been reclassified to conform to this presentation. Please see “Modification of the presentation of Adjusted EBITDA and Adjusted Net Income” and “Use of Non-IFRS Financial Measures” elsewhere in this release.
- Revenue is up 42.7% to ₽2,841 million on the back of a rebound in customer activity as well as the consolidation of Zarplata.ru from
January 1, 2021 . - Net income is up 126.0% to ₽930 million, driven by an increase in revenue as well as recognition of ₽223 million gain on remeasurement of interest in equity-accounted investees.
- Adjusted EBITDA is up 38.4% to ₽1,342 million; Adjusted EBITDA Margin is down to 47.2% from 48.7%, or by 1.5 ppts, as a decrease in marketing expenses and personnel costs as percentage of revenue in our “Russia (hh.ru)” segment was offset by lower margins in our “Russia (Zarplata.ru)” segment on the back of more accentuated revenue seasonality and timing of marketing expenses in this segment.
- Adjusted Net Income is up 46.2% to ₽850 million.
(in millions of RUB and USD) | As of | As of | Change | As of | |||
RUB | RUB | USD | |||||
(5,269) | (3,849) | 36.9% | (69.6) | ||||
Net Debt(1) | 3,356 | 4,909 | (31.6)% | 44.3 | |||
Net Debt to Adjusted EBITDA Ratio(1) (2) | 0.7х | 1.2х |
(1)
(2) For the purposes of calculation of this ratio as of
Net Working Capital as ofMarch 31, 2021 decreased by ₽1,420 million, or 36.9%, compared toDecember 31, 2020 , primarily due to (i) an increase in contract liabilities by ₽710 million from customer prepayments, and (ii) an increase in trade and other payables (current portion) mainly due to ₽623 million consideration payable for the acquisition of LLC “Skillaz” (see “Potential substantive rights over Skillaz”).- Net Debt decreased by ₽1,553 million, or 31.6%, primarily due to an increase of cash from operating activities, a decrease of cash used in financing and investing activities and the effect of exchange rate fluctuations on cash (see “Cash Flows”).
- Net Debt to Adjusted EBITDA Ratio decreased from 1.2x to 0.7x, mainly due to a decrease in Net Debt.
CEO quote
“In Q1 2021, we saw a robust expansion of our core business driven by an improving market environment and strong strategy execution” said
“We continued to observe significant competition for labor force, prompting more businesses in
"Following our long-term strategy of expansion into adjacent markets, we consolidated control in Skillaz, one of the leading
"Lastly, we remain committed to rewarding our shareholders through the cycle and, having evaluated our current business strength and balance sheet liquidity, we are glad to announce a 2020 dividend payment in the amount of
Acquisition of Zarplata.ru in
In
For the purposes of analysis of our key performance indicators, such as the number of paying customers and the average revenue per customer (“ARPC”), we combine our “Russia (hh.ru)” and “Russia (Zarplata.ru)” (collectively “Russia segments”) revenues, as we believe that our combined ARPC and combined number of paying customers allows us to assess better our results and position on Russian online recruitment market, on which both these segments operate.
Potential substantive rights over Skillaz
As at
As at
Accordingly, on
On
Modification of the presentation of Adjusted EBITDA and Adjusted Net Income
Beginning from the first quarter of 2021, we modified the presentation of Adjusted EBITDA and Adjusted Net Income, our non-IFRS measures, to exclude the impact of foreign exchange gains and losses as the nature of such gains and losses is not operational. We believe this revised presentation will provide a better understanding of our operating performance and a more meaningful comparison of our results between periods.
Prior period amounts have been reclassified to conform to this presentation. These changes have no impact on any of the previously reported IFRS results for any periods presented.
The following table presents the effects of the changes on the presentation of non-IFRS measures as reflected in the Company's previous reports:
(in millions of RUB) | For the three months ended | |||||||
Non-IFRS Prior Presentation | Net foreign exchange gain and related income tax effect | Non-IFRS Revised Presentation | ||||||
Adjusted EBITDA | 1,045 | (75 | ) | 970 | ||||
Adjusted EBITDA Margin, % | 52.5 | % | (3.8 | %) | 48.7 | % | ||
Adjusted Net Income | 613 | (32 | ) | 581 | ||||
Adjusted Net Income Margin, % | 30.8 | % | (1.6 | %) | 29.2 | % |
(in millions of RUB) | For the year ended | |||||||
Non-IFRS Prior Presentation | Net foreign exchange gain and related income tax effect | Non-IFRS Revised Presentation | ||||||
Adjusted EBITDA | 4,187 | (83 | ) | 4,104 | ||||
Adjusted EBITDA Margin, % | 50.6 | % | (1.1 | %) | 49.5 | % | ||
Adjusted Net Income | 2,733 | (50 | ) | 2,683 | ||||
Adjusted Net Income Margin, % | 33.0 | % | (0.6 | %) | 32.4 | % |
Impact of the COVID-19 Pandemic on Our Operations and Financial Position
The original outbreak of COVID-19 pandemic in the first half of 2020 affected our financial results mostly via the decrease in business activity in
The most severe restrictions in
As a result, we see no measurable impact of COVID-19 on our financial results for the first quarter of 2021 and financial position as at
Operating Segments
For management purposes, we are organized into operating segments based on the geography of our operations or other subdivisions as presented in internal reporting to our chief operating decision-maker (“CODM”). Our operating segments include “Russia (hh.ru),” “Russia (Zarplata.ru),” “Belarus,” “Kazakhstan” and other countries. As each segment, other than “Russia (hh.ru)” and “Russia (Zarplata.ru)”, individually comprises less than 10% of our revenue, for reporting purposes we combine all segments other than
Customers
We sell our services predominantly to businesses that are looking for job seekers to fill vacancies inside their organizations. We refer to such businesses as “customers.” In
Seasonality
Revenue
We generally do not experience seasonal fluctuations in demand for our services and, prior to COVID-19, our revenue remained relatively stable throughout each quarter. However, our customers are predominately businesses and, therefore, use our services mostly on business days. As a result, our quarterly revenue is affected by the number of business days in a quarter, with the exception of our services that represent “stand-ready” performance obligations, such as subscriptions to access our curriculum vitae (“CV”) database, which are satisfied over the period of subscription, including weekends and holidays.
Public holidays in
The number of business days in a quarter may also be affected by calendar layout in a specific year. In addition, the Government of
The following table illustrates the number of business days by quarter for the years 2019 to 2021. In 2021, compared to 2020, there is one business day less in the first quarter and in the total year, two business days more in the second quarter, and two business days less in the fourth quarter, meaning that a negative calendar effect is expected in each of the first and fourth quarter, and a positive effect is expected in the second quarter:
Number of business days | As % of total business days per year | |||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |||||||||
First quarter | 56 | 57 | 57 | 22.7 | % | 23.0 | % | 23.1 | % | |||||
Second quarter | 62 | 60 | 59 | 25.1 | % | 24.2 | % | 23.9 | % | |||||
Third quarter | 66 | 66 | 66 | 26.7 | % | 26.6 | % | 26.7 | % | |||||
Fourth quarter | 63 | 65 | 65 | 25.5 | % | 26.2 | % | 26.3 | % | |||||
Year | 247 | 248 | 247 | 100.0 | % | 100.0 | % | 100.0 | % |
Operating costs and expenses (exclusive of depreciation and amortization)
Our operating costs and expenses (exclusive of depreciation and amortization) consist primarily of personnel and marketing expenses. Personnel and marketing expenses, in total, accounted for 78.6% and 76.3% of our total operating costs and expenses (exclusive of depreciation and amortization) for the years ended
Marketing expenses are more volatile in terms of allocation to quarters and are affected by our decisions on how we realize our strategy in a particular year, which can differ from year to year. Therefore, total marketing expenses as a percentage of revenue for a particular quarter may not be fully representative of the whole year. Personnel expenses are relatively stable over the year. However, they are also affected by other dynamics, such as our hiring decisions. Some costs and expenses, such as share-based compensation or foreign exchange gains or losses, can be significantly concentrated in a particular quarter.
As an example, the first quarter segment external expenses in our “Russia (hh.ru)” segment in 2019 and 2020 were 23.6% and 24.5%, respectively, of total “Russia (hh.ru)” segment external expenses for the year.
Net income and Adjusted EBITDA
Even though our revenue remains relatively stable throughout each quarter, seasonal revenue fluctuations, as described above, affect our net income. As a result of revenue seasonality, our profitability in the first quarter is usually lower than in other quarters and for the full year, because our expenses as a percentage of revenue are usually higher in the first quarter due to lower revenue. Our profitability is also affected by our decisions on timing of expenses, as described above.
Contract liabilities
Our contract liabilities are mostly affected by the annual subscriptions’ renewal cycle in our Key Accounts customer segment. A substantial number of our Key Accounts renew their subscriptions in the first quarter but prepay us in the fourth quarter of a previous year, as per our normal payment terms. As a result, we receive substantial prepayments from our customers in the fourth quarter which causes a consequential increase in our contract liabilities at the end of that quarter. For example, our contract liabilities as of
Net cash generated from operating activities
Our net cash generated from operating activities is affected by seasonal fluctuations in business activity as explained in “Revenue” and by substantial prepayments from our customers (see “Contract liabilities”), as well as by our decisions in regard to timing of expenses (see “Operating costs and expenses (exclusive of depreciation and amortization)”), and to a lesser extent by payment terms provided to us by our largest suppliers, such as TV advertising agencies and others.
Our
First Quarter 2021 Results
Our revenue was ₽2,841 million for the three months ended
In our
The following table breaks down revenue by product for the periods indicated:
For the three months ended | ||||||
(in thousands of RUB) | 2021 | 2020 | Change | |||
Bundled Subscriptions | 766,466 | 577,713 | 32.7 | % | ||
CV Database Access | 588,965 | 470,586 | 25.2 | % | ||
1,244,511 | 781,413 | 59.3 | % | |||
Other value-added services | 241,173 | 160,697 | 50.1 | % | ||
Total revenue | 2,841,115 | 1,990,409 | 42.7 | % |
The following table sets forth the revenue broken down by type of customer and region for the periods indicated:
For the three months ended | ||||||
(in thousands of RUB) | 2021 | 2020 | Change | |||
Key Accounts in | ||||||
642,938 | 495,398 | 29.8 | % | |||
Other regions of | 259,866 | 192,953 | 34.7 | % | ||
Sub-total | 902,804 | 688,351 | 31.2 | % | ||
Small and Medium Accounts in | ||||||
886,278 | 627,759 | 41.2 | % | |||
Other regions of | 763,059 | 426,407 | 79.0 | % | ||
Sub-total | 1,649,337 | 1,054,166 | 56.5 | % | ||
Foreign customers of | 19,983 | 15,875 | 25.9 | % | ||
Other customers in | 89,819 | 79,852 | 12.5 | % | ||
Total for | 2,661,943 | 1,838,244 | 44.8 | % | ||
Other segments | 179,172 | 152,165 | 17.7 | % | ||
Total Revenue | 2,841,115 | 1,990,409 | 42.7 | % |
The following table sets forth the number of paying customers and ARPC for the periods indicated:
Number of paying customers | ||||||
For the three months ended | ||||||
2021 | 2020 | Change | ||||
Key Accounts in | ||||||
5,123 | 4,695 | 9.1 | % | |||
Other regions of | 5,631 | 4,966 | 13.4 | % | ||
Sub-total | 10,754 | 9,661 | 11.3 | % | ||
Small and Medium Accounts in | ||||||
80,329 | 61,730 | 30.1 | % | |||
Other regions of | 128,930 | 79,031 | 63.1 | % | ||
Sub-total | 209,259 | 140,761 | 48.7 | % | ||
Foreign customers of | 958 | 719 | 33.2 | % | ||
Total for | 220,971 | 151,141 | 46.2 | % | ||
Other segments | 13,451 | 12,750 | 5.5 | % | ||
Total number of paying customers | 234,422 | 163,891 | 43.0 | % | ||
ARPC (in RUB) | ||||||
Key Accounts in | ||||||
125,500 | 105,516 | 18.9 | % | |||
Other regions of | 46,149 | 38,855 | 18.8 | % | ||
Sub-total | 83,951 | 71,250 | 17.8 | % | ||
Small and Medium Accounts in | ||||||
11,033 | 10,169 | 8.5 | % | |||
Other regions of | 5,918 | 5,395 | 9.7 | % | ||
Sub-total | 7,882 | 7,489 | 5.2 | % | ||
Other segments, total | 13,320 | 11,935 | 11.6 | % | ||
- In our Key Accounts in
Moscow andSt. Petersburg customer segment, revenue increased by 29.8%, mostly due to an increase in the ARPC by 18.9%, which was primarily driven by annual price increase and introduction of limits on a number of CV views in our CV database subscriptions effectiveAugust 2020 . - In our Key Accounts in Other regions of
Russia customer segment, revenue increased by 34.7%, mostly due to an increase in the ARPC by 18.8%, which was primarily driven by an annual price increase and the addition of revenues from these customers received in our “Russia (Zarplata.ru)” operating segment. - In our Small and Medium Accounts in
Moscow andSt. Petersburg customer segment, revenue increased by 41.2%, mostly due to an increase in the number of customers by 30.1%, which was primarily driven by acquisition of new customers, as well as low base effect in the end of the first quarter 2020. - In our Small and Medium Accounts in Other regions of
Russia customer segment, revenue increased by 79.0%, mostly due to an increase in the number of customers by 63.1%, which was equally driven by acquisition of new customers and by addition of customers of our “Russia (Zarplata.ru)” operating segment, as well as low base effect in the end of the first quarter 2020.
Operating Costs and Expenses (exclusive of depreciation and amortization)
Operating costs and expenses (exclusive of depreciation and amortization) were ₽1,569 million for the three months ended
The following table sets forth operating costs and expenses (exclusive of depreciation and amortization) for the periods indicated:
(in thousands of RUB) | For the three months ended | |||||||
2021 | 2020 | Change | ||||||
Personnel expenses | (845,709 | ) | (581,237 | ) | 45.5 | % | ||
Marketing expenses | (441,770 | ) | (317,866 | ) | 39.0 | % | ||
Other general and administrative expenses: | ||||||||
Subcontractors and other expenses related to provision of services | (50,404 | ) | (37,180 | ) | 35.6 | % | ||
Office rent and maintenance | (56,224 | ) | (46,280 | ) | 21.5 | % | ||
Professional services | (60,840 | ) | (79,147 | ) | (23.1 | )% | ||
Insurance costs | (46,071 | ) | (43,173 | ) | 6.7 | % | ||
Hosting and other web-site maintenance | (14,460 | ) | (12,034 | ) | 20.2 | % | ||
Other operating expenses | (53,171 | ) | (21,702 | ) | 145.0 | % | ||
Operating costs and expenses (exclusive of depreciation and amortization) | (1,568,649 | ) | (1,138,619 | ) | 37.8 | % |
The following table sets forth operating costs and expenses (exclusive of depreciation and amortization) as percentage of revenue for the periods indicated:
For the three months ended | ||||||||
2021 | 2020 | Change | ||||||
Personnel expenses | 29.8 | % | 29.2 | % | 0.6 | % | ||
Marketing expenses | 15.5 | % | 16.0 | % | (0.4 | )% | ||
Other general and administrative expenses: | ||||||||
Subcontractors and other expenses related to provision of services | 1.8 | % | 1.9 | % | (0.1 | )% | ||
Office rent and maintenance | 2.0 | % | 2.3 | % | (0.3 | )% | ||
Professional services | 2.1 | % | 4.0 | % | (1.8 | )% | ||
Insurance services | 1.6 | % | 2.2 | % | (0.5 | )% | ||
Hosting and other web-site maintenance | 0.5 | % | 0.6 | % | (0.1 | )% | ||
Other operating expenses | 1.9 | % | 1.1 | % | 0.8 | % | ||
Operating costs and expenses (exclusive of depreciation and amortization) | 55.2 | % | 57.2 | % | (2.0 | )% |
Personnel expenses
Personnel expenses for the three months ended
Personnel expenses increased as a percentage of revenue from 29.2% in the first quarter of 2020 to 29.8% in the first quarter of 2021. Personnel expenses (excluding share-based compensations and other items) as a percentage of revenue increased from 26.6% in the first quarter of 2020 to 27.5% in the first quarter of 2021, as our cost-cutting initiatives in the first quarter 2020 in response to COVID-19 are not occurring in the first quarter 2021. See “Use of Non-IFRS Financial Measures” elsewhere in this release for a reconciliation of personnel expenses (excluding share-based compensations and other items) to the nearest IFRS measure.
Our headcount has increased to 1,111 people as of
Marketing expenses
Marketing expenses for the three months ended
Marketing expenses as percentage of revenue were 15.5% in the first quarter of 2021, relatively flat compared to 16.0% in the first quarter of 2020.
Other general and administrative expenses
Our other general and administrative expenses consist primarily of professional services, insurance costs and office rent and maintenance costs. Our total other general and administrative expenses for the three months ended
Our other general and administrative expenses as a percentage of revenue decreased from 12.0% in the first quarter 2020 to 9.9% in the first quarter 2021 mostly due to a decrease in Professional services as various transaction costs related to business combinations and SPO-related costs in the first quarter 2020 not occurring in the first quarter of 2021.
Our other general and administrative expenses (excluding items unrelated to our core business activity) as a percentage of revenue increased from 8.8% in the first quarter of 2020 to 9.8% in the first quarter of 2021, mostly due to our D&O insurance expense no longer relating to our IPO from the second renewal year commenced on
Net foreign exchange gain
Net foreign exchange gain was nil for the three months ended
Depreciation and amortization
Depreciation and amortization were ₽238 million for the three months ended
Finance income and costs
Finance income was ₽69 million for the three months ended
Finance costs were ₽151 million for the three months ended
Gain on remeasurement of previously held interest in equity accounted investees
Gain in the amount of ₽223 million reflects remeasurement of the previously held 25.01% interest in Skillaz at fair value as at
Income tax expense
Income tax expense for the three months ended
The effective tax rate was 21.5% for the three months ended
Net income, Adjusted EBITDA and Adjusted Net Income
In the three months ended
Cash Flows
The following table sets forth the summary cash flow statements for the periods indicated:
(in thousands of RUB) | For the three months ended | |||||||
2021 | 2020 | Change | ||||||
Net cash generated from operating activities | 1,912,574 | 942,362 | 970,212 | |||||
Net cash used in investing activities | (195,915 | ) | (101,224 | ) | (94,691 | ) | ||
Net cash used in financing activities | (257,829 | ) | (58,892 | ) | (198,937 | ) | ||
Net increase in cash and cash equivalents | 1,458,830 | 782,246 | 676,584 | |||||
Cash and cash equivalents, beginning of period | 3,367,610 | 2,089,215 | 1,278,395 | |||||
Effect of exchange rate changes on cash | 7,399 | 232,877 | (225,478 | ) | ||||
Cash and cash equivalents, end of period | 4,833,839 | 3,104,338 | 1,729,501 |
Net cash generated from operating activities
For the three months ended
Net cash used in investing activities
For the three months ended
Net cash used in financing activities
For the three months ended
Capital Expenditures
Our additions to property and equipment and intangible assets for the three months ended
Dividend
Our Board of Directors has approved payment of an interim dividend in 2021 of
As a Russian tax resident, we are subject to the Russian Tax Code requirements and withhold a tax on dividends at a generally applicable rate of 15%. A holder of our ADSs may apply for a lower tax rate under a double taxation treaty (“DTT”) in effect, signed between a country of a shareholder and the
Financial Outlook
The following forward-looking statement reflects our expectations as of
Based on our recent performance, as well as to reflect the consolidation of LLC “Skillaz” we currently expect our revenue to grow in the range of 45% to 50% in year 2021 year-over-year compared to the year 2020.
This outlook reflects our current view, based on the trends that we see at this time, and may change considering market, economic and social developments in jurisdictions in which we operate.
First Quarter 2021 Financial Results Conference Call
HeadHunter will host a conference call and webcast to discuss its results at
We recommend to use the dial-in option only if you would like to ask questions. In this case please dial in at least 15 minutes prior to the call start time and clearly state the requested information. For listen only mode, please use the webcast link. The earnings release can be accessed through our website at https://investor.hh.ru/. Following the call, a replay will be available on our website.
To participate in the conference call, please use the following details:
+44 (0) 2071 928338 | |
+44 (0) 8444 819752 | |
0800 279 6619 | |
+1 646 741 3167 | |
+1 877 870 9135 | |
+7 495 249 9851 | |
810 800 2114 4011 | |
Conference ID: | 2580407 |
Webcast:
https://edge.media-server.com/mmc/p/yg2j9sri
Contacts:
Investor Inquiries
Roman Safiyulin
E-mail: r.safiyulin@hh.ru
Media Inquiries
E-mail: a.dzhabarov@hh.ru
About
HeadHunter is the leading online recruitment platform in
USE OF NON-IFRS FINANCIAL MEASURES
To supplement our consolidated financial statements, which is prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the
- “Adjusted EBITDA” as net income/(loss) plus: (1) income tax expense; (2) net interest costs; (3) depreciation and amortization; (4) transaction costs related to business combinations; (5) expenses related to equity-settled awards, including related social taxes; (6) secondary public offering (“SPO”) related costs; (7) insurance expenses related to IPO; (8) (income) from the depositary; (9) share of (profit)/loss of equity-accounted investees; (10) net (gain)/loss on financial assets measured at fair value through profit and loss; (11) net foreign exchange loss/(gain); (12) (Gain) on remeasurement of previously held interest in equity-accounted investees; (13) other financing and transactional costs .
- “Adjusted Net Income” as net income/(loss) plus: (1) transaction costs related to business combinations; (2) expenses related to equity-settled awards, including related social taxes; (3) secondary public offering (“SPO”) related costs; (4) insurance expenses related to IPO; (5) (income) from the depositary; (6) share of (profit)/loss of equity-accounted investees; (7) amortization of intangible assets recognized in business combinations; (8) tax effect on adjustments; (9) net (gain)/loss on financial assets measured at fair value through profit and loss; (10) net foreign exchange loss/(gain); (11) (Gain) on remeasurement of previously held interest in equity-accounted investees; (12) other financing and transactional costs.
- “Adjusted EBITDA Margin” as Adjusted EBITDA divided by revenue.
- “Adjusted Net Income Margin” as Adjusted Net Income divided by revenue.
____________________________
1 Denotes International Financial Reporting Standards as issued by the
Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin are used by our management to monitor the underlying performance of the business and its operations. Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin are used by different companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. You should exercise caution in comparing Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin as reported by us to Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin as reported by other companies. Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin are unaudited and have not been prepared in accordance with IFRS or any other generally accepted accounting principles.
Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin are not measurements of performance under IFRS or any other generally accepted accounting principles, and you should not consider Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin or Adjusted Net Income Margin as alternatives to net income, operating profit or other financial measures determined in accordance with IFRS or other generally accepted accounting principles. Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin have limitations as analytical tools, and you should not consider them in isolation. Some of these limitations are:
- Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments,
- Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin do not reflect changes in, or cash requirements for, our working capital needs, and
- the fact that other companies in our industry may calculate Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin differently than we do, which limits their usefulness as comparative measures.
The tables at the end of this release provide detailed reconciliations of each non-IFRS financial measure we use from the most directly comparable IFRS financial measure.
We provide earnings guidance on a non-IFRS basis and do not provide earnings guidance on an IFRS basis. A reconciliation of our Adjusted EBITDA Margin guidance to the most directly comparable IFRS financial measure cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including depreciation and amortization, expenses related to equity-settled awards and the other adjustments reflected in our reconciliation of historical non-IFRS financial measures, the amounts of which, could be material.
Adjusted Operating Costs and Expenses (Exclusive of Depreciation and Amortization)
Adjusted Operating Costs and Expenses (Exclusive of Depreciation and Amortization) is a financial measure not defined under IFRS. We believe that Adjusted Operating Costs and Expenses (Exclusive of Depreciation and Amortization) is a useful metric to assess our operating activities. We excluded expenses incurred in connection with potential financing and strategic transactions, including IPO and SPO- related expenses that are not indicative of our ongoing expenses. We also excluded equity-settled awards as these are non-cash expenses and highly dependent on our share price at the time of equity award grants. Therefore, we believe that it is useful for investors and analysts to see operating costs and expenses financial measures excluding the impact of these charges in order to obtain a clearer picture of our operating activity. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. See the tables at the end of this release providing the calculation of Adjusted Operating Costs and Expenses (Exclusive of Depreciation and Amortization).
Net Debt and Net Debt to Adjusted EBITDA Ratio
Net Debt and Net Debt to Adjusted EBITDA Ratio are financial measures not defined under IFRS. We believe that Net Debt and Net Debt to Adjusted EBITDA Ratio are important measures that indicate our ability to repay outstanding debt. These measures should not be considered in isolation or as a substitute for any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. See the tables at the end of this release providing the calculation of Net Debt and discussion of Net Debt to Adjusted EBITDA Ratio.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our expected financial performance and operational performance for the year ending
Unaudited Condensed Consolidated Statement of Income and Comprehensive Income
(in thousands of RUB and USD, except per share amounts)
For the three months ended | ||||||||
2021 | 2020 | 2021 | ||||||
RUB | RUB | USD | ||||||
Revenue | 2,841,115 | 1,990,409 | 37,530 | |||||
Operating costs and expenses (exclusive of depreciation and amortization) | (1,568,649 | ) | (1,138,619 | ) | (20,721 | ) | ||
Depreciation and amortization | (237,973 | ) | (184,406 | ) | (3,144 | ) | ||
Operating income | 1,034,493 | 667,384 | 13,665 | |||||
Finance income | 69,492 | 19,158 | 918 | |||||
Finance costs | (150,731 | ) | (118,833 | ) | (1,991 | ) | ||
Other income | 13,077 | 9,689 | 173 | |||||
Net foreign exchange (loss)/gain | (222 | ) | 75,313 | (3 | ) | |||
Gain on remeasurement of previously held interest in equity accounted investees | 223,308 | – | 2,950 | |||||
Share of loss of equity-accounted investees (net of income tax) | (4,864 | ) | (9,544 | ) | (64 | ) | ||
Profit before income tax | 1,184,553 | 643,167 | 15,648 | |||||
Income tax expense | (254,207 | ) | (231,429 | ) | (3,358 | ) | ||
Net income for the period | 930,346 | 411,738 | 12,290 | |||||
Attributable to: | ||||||||
Owners of the Company | 898,801 | 363,463 | 11,873 | |||||
Non-controlling interest | 31,545 | 48,275 | 417 | |||||
Comprehensive (loss)/income | ||||||||
Items that are or may be reclassified subsequently to profit or loss: | ||||||||
Foreign currency translation differences | 9,218 | 25,518 | 122 | |||||
Total comprehensive income, net of tax | 939,564 | 437,256 | 12,411 | |||||
Attributable to: | ||||||||
Owners of the Company | 906,138 | 386,012 | 11,970 | |||||
Non-controlling interest | 33,426 | 51,244 | 442 | |||||
Earnings per share | ||||||||
Basic (in Russian Rubles per share) | 17.86 | 7.27 | 0.24 | |||||
Diluted (in Russian Rubles per share) | 17.34 | 7.05 | 0.23 | |||||
Unaudited Condensed Consolidated Statement of Financial Position
As at
(in thousands of RUB and USD) | ||||||||
RUB | RUB | USD | ||||||
Non-current assets | ||||||||
10,669,381 | 9,875,224 | 140,939 | ||||||
Intangible assets | 3,856,940 | 3,439,959 | 50,949 | |||||
Property and equipment | 442,332 | 466,725 | 5,843 | |||||
Equity-accounted investees | – | 129,666 | – | |||||
Right-of-use assets | 196,862 | 215,120 | 2,600 | |||||
Deferred tax assets | 224,658 | 176,328 | 2,968 | |||||
Loans issued to equity-accounted investees | – | 11,541 | – | |||||
Other financial assets | – | 25,491 | – | |||||
Other non-current assets | 26,983 | 22,176 | 356 | |||||
Total non-current assets | 15,417,156 | 14,362,230 | 203,655 | |||||
Current assets | ||||||||
Trade and other receivables | 95,982 | 69,120 | 1,268 | |||||
Indemnification asset | 188,624 | 186,473 | 2,492 | |||||
Loans issued (current portion) | 3,224 | 8,178 | 43 | |||||
Prepaid expenses and other current assets | 145,040 | 179,118 | 1,916 | |||||
Cash and cash equivalents | 4,833,839 | 3,367,610 | 63,853 | |||||
Total current assets | 5,266,709 | 3,810,499 | 69,571 | |||||
Total assets | 20,683,865 | 18,172,729 | 273,226 | |||||
Equity | ||||||||
Share capital | 8,597 | 8,597 | 114 | |||||
Share premium | 2,015,613 | 1,987,044 | 26,626 | |||||
Foreign currency translation reserve | (84,803 | ) | (92,140 | ) | (1,120 | ) | ||
Retained earnings | 2,434,938 | 1,536,137 | 32,165 | |||||
Total equity attributable to owners of the Company | 4,374,345 | 3,439,638 | 57,784 | |||||
Non-controlling interest | 156,771 | 69,104 | 2,071 | |||||
Total equity | 4,531,116 | 3,508,742 | 59,854 | |||||
Non-current liabilities | ||||||||
Loans and borrowings | 7,678,085 | 7,791,326 | 101,425 | |||||
Lease liabilities | 144,706 | 164,245 | 1,912 | |||||
Deferred tax liabilities | 634,230 | 658,970 | 8,378 | |||||
Contract liabilities | 134,004 | – | 1,770 | |||||
Trade and other payables | 118,727 | 178,607 | 1,568 | |||||
Provisions | 99,747 | 87,822 | 1,318 | |||||
Other non-current liabilities | 131,812 | 142,531 | 1,741 | |||||
Total non-current liabilities | 8,941,311 | 9,023,501 | 118,111 | |||||
Current liabilities | ||||||||
Contract liabilities | 3,495,800 | 2,785,402 | 46,178 | |||||
Trade and other payables | 1,973,102 | 1,273,089 | 26,064 | |||||
Loans and borrowings (current portion) | 512,038 | 485,100 | 6,764 | |||||
Lease liabilities (current portion) | 79,199 | 77,752 | 1,046 | |||||
Income tax payable | 461,535 | 401,733 | 6,097 | |||||
Provisions (current portion) | 649,101 | 578,651 | 8,574 | |||||
Other current liabilities | 40,663 | 38,759 | 537 | |||||
Total current liabilities | 7,211,438 | 5,640,486 | 95,260 | |||||
Total liabilities | 16,152,749 | 14,663,987 | 213,372 | |||||
Total equity and liabilities | 20,683,865 | 18,172,729 | 273,226 | |||||
Unaudited Condensed Consolidated Statement of Cash Flows
For the three months ended
(in thousands of RUB and USD) | ||||||||
RUB | RUB | USD | ||||||
OPERATING ACTIVITIES: | ||||||||
Net income for the period | 930,346 | 411,738 | 12,290 | |||||
Adjusted for non-cash items and items not affecting cash flow from operating activities: | ||||||||
Depreciation and amortization | 237,973 | 184,406 | 3,144 | |||||
Net finance costs | 81,239 | 99,675 | 1,073 | |||||
Gain on remeasurement of previously held interest in equity accounted associates | (223,308 | ) | – | (2,950 | ) | |||
Net foreign exchange (gain)/loss | 222 | (75,313 | ) | 3 | ||||
Other non-cash items | (617 | ) | (724 | ) | (8 | ) | ||
Management incentive agreement, including social taxes | 66,591 | 53,506 | 880 | |||||
Share-based payments to Board of directors | 5,433 | 5,319 | 72 | |||||
Share of loss of equity-accounted investees, net of income tax | 4,864 | 9,544 | 64 | |||||
Income tax expense | 254,207 | 231,429 | 3,358 | |||||
Change in trade receivables and other operating assets | 14,098 | (7,029 | ) | 186 | ||||
Change in contract liabilities | 671,946 | 210,117 | 8,876 | |||||
Change in trade and other payables | 285,756 | (63,828 | ) | 3,775 | ||||
Change in other liabilities | (12,462 | ) | (8,526 | ) | (165 | ) | ||
Income tax paid | (266,002 | ) | (100,762 | ) | (3,514 | ) | ||
Interest paid | (137,712 | ) | (7,190 | ) | (1,819 | ) | ||
Net cash generated from operating activities | 1,912,574 | 942,362 | 25,264 | |||||
INVESTING ACTIVITIES: | ||||||||
Payment of deferred consideration for the acquisition of subsidiary | (233,836 | ) | – | (3,089 | ) | |||
Acquisition of subsidiary, net of cash acquired | 66,524 | – | 879 | |||||
Acquisition of intangible assets | (43,598 | ) | (27,083 | ) | (576 | ) | ||
Acquisition of property and equipment | (14,279 | ) | (81,695 | ) | (189 | ) | ||
Interest received | 29,274 | 7,554 | 387 | |||||
Net cash used in investing activities | (195,915 | ) | (101,224 | ) | (2,588 | ) | ||
FINANCING ACTIVITIES: | ||||||||
Bank loans and other borrowings origination fees paid | (41,971 | ) | – | (554 | ) | |||
Bank loan repaid | (121,447 | ) | – | (1,604 | ) | |||
Payment for lease liabilities | (19,440 | ) | (10,445 | ) | (257 | ) | ||
Dividends paid to non-controlling interest | (74,971 | ) | (48,447 | ) | (990 | ) | ||
Net cash used in financing activities | (257,829 | ) | (58,892 | ) | (3,406 | ) | ||
Net increase/(decrease) in cash and cash equivalents | 1,458,830 | 782,246 | 19,271 | |||||
Cash and cash equivalents, beginning of period | 3,367,610 | 2,089,215 | 44,485 | |||||
Effect of exchange rate changes on cash | 7,399 | 232,877 | 98 | |||||
Cash and cash equivalents, end of period | 4,833,839 | 3,104,338 | 63,853 | |||||
Reconciliations of non-IFRS financial measures from the nearest comparable IFRS measures
Reconciliation of EBITDA and Adjusted EBITDA from net income, the most directly comparable IFRS Financial measure:
(in thousands of RUB) | For the three months ended | ||||
2021 | 2020 | ||||
Net income | 930,346 | 411,738 | |||
Add the effect of: | |||||
Income tax expense | 254,207 | 231,429 | |||
Net interest costs | 115,747 | 99,675 | |||
Depreciation and amortization | 237,973 | 184,406 | |||
EBITDA | 1,538,273 | 927,248 | |||
Add the effect of: | |||||
Equity-settled awards, including related social taxes(1) | 65,106 | 52,060 | |||
Other financing and transactional costs(2) | 3,656 | – | |||
SPO-related costs(3) | – | 14,920 | |||
Transaction costs related to business combinations (4) | – | 11,119 | |||
Insurance cover related to IPO(5) | – | 38,832 | |||
Income from depository(6) | (12,462 | ) | (8,526 | ) | |
Net foreign exchange loss/(gain) (7) | 222 | (75,313 | ) | ||
(Gain) on remeasurement of previously held interest in equity-accounted investees (8) | (223,308 | ) | – | ||
(Gain) on financial asset measured at fair value through profit or loss(9) | (34,508 | ) | – | ||
Share of loss of equity-accounted investees(10) | 4,864 | 9,544 | |||
Adjusted EBITDA | 1,341,843 | 969,884 | |||
(1) Represents non-cash expenses related to equity-settled awards issued in accordance with the Management Incentive Agreement, and equity-settled share-based awards issued to board members and related social taxes, which are payable as a result of us becoming Russian tax resident in
(2) Reflects legal, accounting and other professional fees incurred in connection with potential financing and strategic transactions that are not indicative of our ongoing expenses.
(3) Reflects legal, accounting, and other professional fees incurred in connection with our secondary public offering that took place in
(4) Reflects transaction costs related to the acquisition of Zarplata.ru in
(5) Subsequent to and in connection with the IPO, we purchased a one-year insurance policy for
(6) In connection with our IPO, we have signed the Deposit Agreement, in accordance with which we shall receive income from our depositary over the five-year period from the date of the IPO, provided that we meet certain covenants as specified in the Deposit Agreement. We believe that this income does not relate to our ordinary course of business.
(7) Foreign exchange gains or losses do not relate to our operating activities.
(8) Reflects gain on remeasurement of the previously held interest in LLC “Skilaz” at fair value as at the acquisition date as of
(9) Represents change in fair value of the call option to purchase an additional 40.01% ownership interest in LLC Skillaz.
(10) On
Reconciliation of Adjusted Net Income from net income, the most directly comparable IFRS Financial measure:
(in thousands of RUB) | For the three months ended | ||||
2021 | 2020 | ||||
Net income | 930,346 | 411,738 | |||
Add the effect of: | |||||
Equity-settled awards, including related social taxes(1) | 65,106 | 52,060 | |||
Other financing and transactional costs(2) | 3,656 | – | |||
SPO-related costs(3) | – | 14,920 | |||
Transaction costs related to business combinations (4) | – | 11,119 | |||
Insurance cover related to IPO(5) | – | 38,832 | |||
Income from depository(6) | (12,462 | ) | (8,526 | ) | |
Net foreign exchange loss/(gain) (7) | 222 | (75,313 | ) | ||
(Gain) on remeasurement of previously held interest in equity-accounted investees (8) | (223,308 | ) | – | ||
(Gain) on financial asset measured through profit or loss(9) | (34,508 | ) | – | ||
Share of loss of equity-accounted investees(10) | 4,864 | 9,544 | |||
Amortization of intangible assets recognized in business combinations(11) | 144,689 | 103,947 | |||
Tax effect on adjustments(12) | (28,938 | ) | 22,873 | ||
Adjusted Net income | 849,667 | 581,194 |
(1) Represents non-cash expenses related to equity-settled awards issued in accordance with the Management Incentive Agreement, and equity-settled share-based awards issued to board members and related social taxes, which are payable as a result of us becoming a Russian tax resident in
(2) Reflects legal, accounting and other professional fees incurred in connection with potential financing and strategic transactions that are not indicative of our ongoing expenses.
(3) Reflects legal, accounting, and other professional fees incurred in connection with our secondary public offering that took place in
(4) Reflects transaction costs related to the acquisition of Zarplata.ru in
(5) Subsequent to and in connection with the IPO, we purchased a one-year insurance policy for
(6) In connection with our IPO, we signed the Deposit Agreement, in accordance with which we shall receive income from our depositary over the five-year period from the date of the IPO, provided that we meet certain covenants as specified in the Deposit Agreement. We believe that this income does not relate to our ordinary course of business.
(7) Foreign exchange gains or losses do not relate to our operating activities.
(8) Reflects gain on remeasurement of the previously held interest in LLC “Skilaz” at fair value as at the acquisition date as of
(9) Represents change in fair value of the call option to purchase an additional 40.01% ownership interest in LLC Skillaz.
(10) On
(11) As a result of the following business combinations: acquisition of 100% ownership interest in HeadHunter in 2016 and acquisition of 100% ownership interest in Zarplata in 2020. We recognized the following intangible assets: (i) trademark and domain names in the amount of ₽2,010,030 thousand, (ii) non-contractual customer relationships in the amount of ₽2,646,501 thousand and (iii) CV database in the amount of ₽720,909 thousand, and (iv) website software in the amount of ₽82,548 which have a useful life of 10 years, 5-10 years, 2-10 years and 3 years respectively.
(12) Represents income tax on taxable or deductible adjustments.
Reconciliation of operating costs and expenses (exclusive of depreciation and amortization), the most directly comparable IFRS financial measure, to Adjusted Operating Costs and Expenses (Exclusive of Depreciation and Amortization):
For the three months ended | For the three months ended | ||||||||||||||||||||||
(in thousands of RUB) | Personnel expenses | Marketing expenses | Other general and administrative expenses | Total | Personnel expenses | Marketing expenses | Other general and administrative expenses | Total | |||||||||||||||
Operating costs and expenses (exclusive of depreciation and amortization) | (845,709 | ) | (441,770 | ) | (281,170 | ) | (1,568,649 | ) | (581,237 | ) | (317,866 | ) | (239,516 | ) | (1,138,619 | ) | |||||||
Add the effect of: | |||||||||||||||||||||||
Equity-settled awards, including social taxes(1) | 65,106 | – | – | 65,106 | 52,060 | – | – | 52,060 | |||||||||||||||
Insurance cover related to IPO(2) | – | – | – | – | – | – | 38,832 | 38,832 | |||||||||||||||
Transaction costs related to business combinations(3) | – | – | – | – | – | – | 11,119 | 11,119 | |||||||||||||||
SPO-related costs(4) | – | – | – | – | – | – | 14,920 | 14,920 | |||||||||||||||
Other financing and transactional costs(5) | – | – | 3,654 | 3,654 | – | – | – | – | |||||||||||||||
Adjusted Operating Costs and Expenses (Exclusive of Depreciation and Amortization) | (780,603 | ) | (441,770 | ) | (277,516 | ) | (1,499,889 | ) | (529,177 | ) | (317,866 | ) | (174,645 | ) | (1,021,688 | ) |
(1) Represents non-cash expenses related to equity-settled awards issued in accordance with the Management Incentive Agreement, and equity-settled share-based awards issued to board members and related social taxes, which are payable as a result of us becoming a Russian tax resident in
(2) Subsequent to and in connection with the IPO, we purchased a one-year insurance policy for
(3) Reflects transaction costs mainly related to the acquisition of Zarplata.ru in
(4) Reflects legal, accounting, and other professional fees incurred in connection with our secondary public offering that took place in
(5) Reflects legal, accounting and other professional fees incurred in connection with potential financing and strategic transactions that are not indicative of our ongoing expenses.
We believe that
Calculation of our
(in thousands of RUB) | As of | As of | |||
Trade and other receivables | 95,982 | 69,120 | |||
Prepaid expenses and other current assets | 145,040 | 179,118 | |||
Contract liabilities | (3,495,800 | ) | (2,785,402 | ) | |
Trade and other payables | (1,973,102 | ) | (1,273,090 | ) | |
Other current liabilities | (40,663 | ) | (38,758 | ) | |
(5,268,543 | ) | (3,849,012 | ) |
We believe that Net Debt and Net Debt to Adjusted EBITDA Ratio are important measures that indicate our ability to repay outstanding debt.
Calculation of our net debt is presented in the table below:
(in thousands of RUB) | As of | As of | |||
Loans and borrowings | 7,678,085 | 7,791,326 | |||
Loans and borrowings (current portion) | 512,038 | 485,100 | |||
Cash and cash equivalents | (4,833,839 | ) | (3,367,610 | ) | |
Net Debt | 3,356,284 | 4,908,816 |
Calculation of Adjusted EBITDA on the last twelve months basis as of
(in thousands of RUB) | RUB | |
Adjusted EBITDA for the year ended | 4,103,715 | |
Less Adjusted EBITDA for the three months ended | (969,884 | ) |
Add Adjusted EBITDA for the three months ended | 1,341,841 | |
Adjusted EBITDA on the last twelve months basis as of | 4,475,672 |
(1) Beginning from the first quarter of 2021, we modified the presentation of Adjusted EBITDA and Adjusted Net Income, our non-IFRS measures, to exclude the impact of foreign exchange gains and losses. Prior period amounts have been reclassified to conform to this presentation. Please see “Modification of the presentation of Adjusted EBITDA and Adjusted Net Income” and “Use of Non-IFRS Financial Measures” elsewhere in this release.
We calculate our Net Debt to Adjusted EBITDA Ratio by dividing Net Debt by Adjusted EBITDA.
(in thousands of RUB, except ratio) | As of | As of | |
Net Debt | 3,356,284 | 4,908,816 | |
Adjusted EBITDA | 4,475,672 | 4,103,715 | |
Net Debt to Adjusted EBITDA Ratio | 0.7x | 1.2x |
Reconciliation of EBITDA and Adjusted EBITDA for the year ended
(in thousands of RUB) | For the year ended | |
2020 | ||
Net income | 1,885,825 | |
Add the effect of: | ||
Income tax expense | 685,772 | |
Net interest costs | 350,216 | |
Depreciation and amortization | 750,558 | |
EBITDA | 3,672,371 | |
Add the effect of: | ||
Equity-settled awards, including social taxes(1) | 249,286 | |
SPO-related costs(2) | 151,087 | |
Insurance cover related to IPO(3) | 54,772 | |
Income from depository(4) | (41,617 | ) |
Net foreign exchange loss/(gain) (5) | (83,030 | ) |
Transaction costs related to business combinations(6) | 51,665 | |
Share of loss of equity-accounted investees(7) | 49,181 | |
Adjusted EBITDA | 4,103,715 |
(1) Represents non-cash expenses related to equity-settled awards issued in accordance with the Management Incentive Agreement, and equity-settled share-based awards issued to board members and related social taxes, which are payable as a result of us becoming Russian tax resident in
(2) Reflects legal, accounting, and other professional fees incurred in connection with our secondary public offering that took place in
(3) Subsequent to and in connection with the IPO, we purchased a one-year insurance policy for
(4) In connection with our IPO, we have signed the Deposit Agreement, in accordance with which we shall receive income from our depositary over the five-year period from the date of the IPO, provided that we meet certain covenants as specified in the Deposit Agreement. We believe that this income does not relate to our ordinary course of business.
(5) Foreign exchange gains or losses do not relate to our operating activities.
(6) Reflects transaction costs related to the acquisition of Zarplata.ru in
(7) On
Source:
2021 GlobeNewswire, Inc., source