Fourth Quarter 2019 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 | 2,066 | 1,683 | 22.8 | % | 33.4 | |||||
Russia Segment Revenue | 1,914 | 1,565 | 22.3 | % | 30.9 | |||||
Net Income | 496 | 389 | 27.7 | % | 8.0 | |||||
Net Income Margin, % | 24.0 | % | 23.1 | % | 0.9 ppts | |||||
Adjusted EBITDA(5) | 1,023 | 838 | 22.1 | % | 16.5 | |||||
Adjusted EBITDA Margin, %(5) | 49.5 | % | 49.8 | % | (0.3) ppts | |||||
Adjusted Net Income(5) | 713 | 494 | 44.2 | % | 11.5 | |||||
Adjusted Net Income Margin, %(5) | 34.5 | % | 29.4 | % | 5.1 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.
(4) Dollar translations are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the
(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 to the nearest IFRS measure.
- Revenue is up 22.8% primarily due to the increase in revenue in our
Russia segment. TheRussia segment revenue is up 22.3%, mainly driven by an increase of 17.2% in the number of paying customers in Small and Medium Accounts and an increase of 17.3% in the average revenue per customer (“ARPC”) in Key Accounts inMoscow andSt. Petersburg . Revenue growth in the fourth quarter 2019 was adversely affected by the cancellation of free product offering fromOctober 1, 2018 , not occurring in this year. - Net Income is up to ₽496 million from ₽389 million, mainly driven by the increase in revenue.
- Adjusted EBITDA is up 22.1% primarily due to an increase in revenue. Adjusted EBITDA Margin remained relatively flat, primarily as a result of an increase in marketing expenses as a percentage of revenue due to the allocation of online marketing expenses in the fourth quarter and an increase in net foreign exchange loss that was partly offset by a decrease in office rent and maintenance expenses as a percentage of revenue.
- Adjusted Net Income is up 44.2% primarily due to the increase in revenue, and Adjusted Net Income Margin is up to 34.5% from 29.4% as our effective tax rate decreased.
(in millions of RUB and USD) | As of | As of | Change | As of | |||||||
RUB | RUB | | USD | ||||||||
(2,994 | ) | (2,623 | ) | 14.1 | % | (48.4 | ) | ||||
Net Debt(1) | 3,040 | 3,577 | (15.0 | )% | 49.1 | ||||||
Net Debt to Adjusted EBITDA Ratio(1) | 0.8 | x | 1.3 | x |
(1)
Net Working Capital as ofDecember 31, 2019 decreased by ₽371 million, or 14.1%, primarily due to increase in contract liabilities over the twelve months endedDecember 31, 2019 by 14.2% due to an increase in sales. The growth in contract liabilities for the year endedDecember 31, 2019 was adversely affected by our decision not to offer customers an opportunity to renew a contract for the same price if they paid us beforeJanuary 1, 2020 , the effective date of our new price list, as we did in the year endedDecember 31, 2018 . This resulted in a substantial amount of prepayments shifting from the fourth quarter of 2019 to the first quarter of 2020.- Net Debt decreased by ₽537 million, or 15%, as cash generated from operating activities was partly offset by dividend payments, acquisition of a 25.01% ownership interest in LLC “Skilaz”, a Russian HR technology company which automates routine recruiting processes, for ₽235 million, capital expenditures on renovation of our office premises of ₽197 million, and the effect of exchange rate fluctuations on cash.
- Net Debt to Adjusted EBITDA Ratio declined from 1.3x to 0.8x, mainly due to an increase in Adjusted EBITDA.
FY 2019 Financial and Operational Highlights
(in millions of RUB(6) and USD(7)) | Twelve months ended | Twelve months ended | Change(8) | Twelve months ended | ||||||
RUB | RUB | | USD(9) | |||||||
Revenue | 7,789 | 6,118 | 27.3 | % | 125.8 | |||||
Russia Segment Revenue | 7,212 | 5,700 | 26.5 | % | 116.5 | |||||
Net Income | 1,581 | 1,033 | 53.1 | % | 25.5 | |||||
Net Income Margin, % | 20.3 | % | 16.9 | % | 3.4 ppts | |||||
Adjusted EBITDA(10) | 3,931 | 2,855 | 37.7 | % | 63.5 | |||||
Adjusted EBITDA Margin, %(10) | 50.5 | % | 46.7 | % | 3.8 ppts | |||||
Adjusted Net Income(10) | 2,409 | 1,538 | 56.6 | % | 38.9 | |||||
Adjusted Net Income Margin, %(10) | 30.9 | % | 25.1 | % | 5.8 ppts |
(6) “RUB” or “₽” denote Russian Ruble throughout this release.
(7) “USD” or “$” denote
(8) 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.
(9) Dollar translations are included solely for the convenience of the reader and were calculated at the exchange rate quoted by the
(10) 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 to the nearest IFRS measure.
- Revenue is up 27.3% primarily due to the increase in revenue in our
Russia segment. TheRussia segment revenue is up 26.5%, mainly driven by an increase of 28.0% in the number of paying customers in Small and Medium Accounts and an increase of 20.6% in the average revenue per customer (“ARPC”) in Key Accounts inMoscow andSt. Petersburg . - Net Income is up to ₽1,581 million from ₽1,033 million, mainly driven by the increase in revenue.
- Adjusted EBITDA is up 37.7% primarily due to an increase in revenue, and Adjusted EBITDA Margin is up to 50.5% from 46.7% as our personnel expenses (excluding equity-settled share-based compensations), marketing expenses, and general and administrative expenses (excluding IPO-related costs) declined as a percentage of revenue.
- Adjusted Net Income is up 56.6% primarily due to the increase in revenue, and Adjusted Net Income Margin is up to 30.9% from 25.1% as our expenses declined as a percentage of revenue and our effective tax rate decreased.
CEO quote
Against a backdrop of global economic turbulence and in a period when it has been especially important for us to build trust and long-term relationships with the investor community, we have posted remarkable financial and operational results in our first year post IPO” said
We have delivered on all the major pillars of our expansive growth strategy, such as penetration into areas outside of
Besides volume growth, we are satisfied with the way that our monetization strategy has unfolded, where we have demonstrated our ability to drive up the average check of our clients via a combination of consumption growth and consistent price increase. To support our monetization efforts we had been able to concurrently enhance the efficiency of our products across all platforms. As a notable example, we spent sizable resources this year on an AI-driven search and recommendation engine leading to an increase in the average number of applications per vacancy by ca. 20%. The vast majority of that efficiency is derived from organic traffic flows which provides us with an incredible competitive advantage, which in turn strengthens our market position even at a time when our competitors are intensifying their investments in marketing.
We have shown our abilities to manage resources in an efficient way and scale up the business faster than the cost base, which has resulted in substantial operational margin expansion during 2019. In times of uncertainty around future economic development we believe it’s especially important for us to stay flexible, fully tech-enabled and a highly cash-generative business.
Overall, whilst we are happy with our results to date, we stay cautious on the impact of the COVID-19 virus. We hope that stability will return in the near future leading to a consequent acceleration in the economy in general and the recruitment market in particular.
Finally, we’re very pleased to reward our shareholders with a significant share of the 2019 net profits to be paid in dividends.
Operating Segments
For management purposes, we are organized into operating segments based on the geography of our operations. Our operating segments include “Russia,” “Belarus,” “Kazakhstan” and other countries. As each segment, 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 our revenue remains 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 2017 to 2019. In 2019, the total number of working days is the same as in 2018, but there is 1 business day more, 2 business days less, and 1 business day more in the first quarter, second quarter, and third quarter, respectively, and the same number of business days in the fourth quarter:
Number of business days | As % of total business days per year | |||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||
First quarter | 57 | 56 | 57 | 23.1 | % | 22.7 | % | 23.1 | % | |||||
Second quarter | 59 | 61 | 61 | 23.9 | % | 24.7 | % | 24.7 | % | |||||
Third quarter | 66 | 65 | 65 | 26.7 | % | 26.3 | % | 26.3 | % | |||||
Fourth quarter | 65 | 65 | 64 | 26.3 | % | 26.3 | % | 25.9 | % | |||||
Year | 247 | 247 | 247 | 100.0 | % | 100.0 | % | 100.0 | % |
Therefore, in the fourth quarter of 2019, there was no impact on our revenue and revenue growth rate from the number of business days.
Operating costs and expenses (exclusive of depreciation and amortization)
Personnel and marketing expenses, in total, accounted for 76.3% and 77.4% 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.
Fourth quarter segment external expenses in our
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. For example, our Adjusted EBITDA Margin was 46.1% for the first quarter of 2019, compared to 50.5% for the full year 2019. Our profitability is also affected by our decisions on timing of expenses, again as described above.
Contract liabilities
Our contract liabilities are 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 and 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 consequential increase in our contract liabilities at the end of that quarter. For example, our contract liabilities as of
The growth in contract liabilities for the year ended
Net cash generated from operating activities
Our net cash generated from operating activities is affected by seasonal fluctuations of 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 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.
Net working capital
Our net working capital is primarily affected by changes in our contract liabilities as discussed above. As our contract liabilities are usually highest in the fourth quarter, our net working capital is usually lowest in the fourth quarter. For example, our net working capital of
Fourth Quarter 2019 Results
Our revenue was ₽2,066 million for the three months ended
The following table breaks down revenue by product:
For the three months ended | For the twelve months ended | ||||||||||||
(in thousands of RUB) | 2019 | 2018 | Change | 2019 | 2018 | Change | |||||||
Bundled Subscriptions | 581,484 | 521,409 | 11.5 | % | 2,223,951 | 1,946,379 | 14.3 | % | |||||
CV Database Access | 448,931 | 354,309 | 26.7 | % | 1,761,728 | 1,401,538 | 25.7 | % | |||||
821,930 | 626,753 | 31.1 | % | 3,112,188 | 2,227,926 | 39.7 | % | ||||||
Other value-added services | 214,013 | 180,157 | 18.8 | % | 690,874 | 541,930 | 27.5 | % | |||||
Total revenue | 2,066,358 | 1,682,628 | 22.8 | % | 7,788,741 | 6,117,773 | 27.3 | % |
The following table sets forth the revenue broken down by type of customer and region:
For the three months ended | For the twelve months ended | ||||||||||||
(in thousands of RUB) | 2019 | 2018 | Change | 2019 | 2018 | Change | |||||||
Key Accounts in | |||||||||||||
537,981 | 469,944 | 14.5 | % | 1,981,959 | 1,695,823 | 16.9 | % | ||||||
Other regions of | 200,631 | 163,908 | 22.4 | % | 664,649 | 547,710 | 21.4 | % | |||||
Sub-total | 738,612 | 633,852 | 16.5 | % | 2,646,608 | 2,243,533 | 18.0 | % | |||||
Small and Medium Accounts in | |||||||||||||
649,335 | 552,657 | 17.5 | % | 2,579,517 | 2,150,685 | 19.9 | % | ||||||
Other regions of | 418,479 | 308,186 | 35.8 | % | 1,614,359 | 1,036,346 | 55.8 | % | |||||
Sub-total | 1,067,814 | 860,843 | 24.0 | % | 4,193,876 | 3,187,031 | 31.6 | % | |||||
Other customers in | 102,358 | 64,784 | 58.0 | % | 329,893 | 238,353 | 38.4 | % | |||||
Foreign customers of | 5,259 | 5,186 | 1.4 | % | 41,385 | 31,507 | 31.4 | % | |||||
Total for “Russia” operating segment | 1,914,043 | 1,564,665 | 22.3 | % | 7,211,762 | 5,700,424 | 26.5 | % | |||||
Other segments | 152,315 | 117,963 | 29.1 | % | 576,979 | 417,349 | 38.2 | % | |||||
Total revenue | 2,066,358 | 1,682,628 | 22.8 | % | 7,788,741 | 6,117,773 | 27.3 | % | |||||
The following table sets forth the number of paying customers and ARPC for the periods indicated:
For the three months ended | For the twelve months ended | ||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||
Number of paying customers | |||||||||||||
Key Accounts | |||||||||||||
4,506 | 4,616 | (2.4 | )% | 5,368 | 5,538 | (3.1 | )% | ||||||
Other regions of | 4,657 | 4,306 | 8.2 | % | 5,757 | 5,198 | 10.8 | % | |||||
Key Accounts, total | 9,163 | 8,922 | 2.7 | % | 11,125 | 10,736 | 3.6 | % | |||||
Small and Medium Accounts | |||||||||||||
61,275 | 54,557 | 12.3 | % | 123,295 | 109,498 | 12.6 | % | ||||||
Other regions of | 75,491 | 62,184 | 21.4 | % | 162,005 | 113,345 | 42.9 | % | |||||
Small and Medium Accounts, total | 136,766 | 116,741 | 17.2 | % | 285,300 | 222,843 | 28.0 | % | |||||
Foreign customers of | 533 | 945 | (43.6 | )% | 1,253 | 1,937 | (35.3 | )% | |||||
Total for “Russia” operating segment | 146,462 | 126,608 | 15.7 | % | 297,678 | 235,516 | 26.4 | % | |||||
Other segments, total | 12,846 | 10,221 | 25.7 | % | 24,715 | 17,437 | 41.7 | % | |||||
Total number of paying customers | 159,308 | 136,829 | 16.4 | % | 322,393 | 252,953 | 27.5 | % | |||||
ARPC (in RUB) | |||||||||||||
Key Accounts | |||||||||||||
119,392 | 101,808 | 17.3 | % | 369,217 | 306,216 | 20.6 | % | ||||||
Other regions of | 43,082 | 38,065 | 13.2 | % | 115,451 | 105,369 | 9.6 | % | |||||
Key Accounts, total | 80,608 | 71,044 | 13.5 | % | 237,897 | 208,973 | 13.8 | % | |||||
Small and Medium Accounts | |||||||||||||
10,597 | 10,130 | 4.6 | % | 20,922 | 19,641 | 6.5 | % | ||||||
Other regions of | 5,543 | 4,956 | 11.9 | % | 9,965 | 9,143 | 9.0 | % | |||||
Small and Medium Accounts, total | 7,808 | 7,374 | 5.9 | % | 14,700 | 14,302 | 2.8 | % | |||||
Other segments, total | 11,857 | 11,541 | 2.7 | % | 23,345 | 23,935 | (2.5 | )% | |||||
- Our customer base has continued to expand, as our penetration into the online recruitment in Russian regions outside of
Moscow andSt. Petersburg and Small and Medium Accounts continues to grow. Growth in the number of paying customers in our Small and Medium Accounts in Other regions ofRussia was affected by the cancellation of free product offering fromOctober 1, 2018 not occurring in this year. - In our Key Accounts, ARPC has increased by 17.3% in
Moscow andSt. Petersburg and by 13.2% in Other regions ofRussia . Increase in the ARPC inMoscow andSt. Petersburg was driven by (1) the increase in prices effectiveJanuary 1, 2019 (e.g. 10% on average for subscriptions and 18% for a single “Standard” type job posting), (2) a reduction in discounts, and (3) the increase in the usage of service, which was driven by the increase in the average number of job postings per customer, while the average number of subscription days per customer (total for Bundled Subscriptions and CV Database access) remained flat. - In our Small and Medium Accounts, ARPC has increased by 4.6% in
Moscow andSt. Petersburg and by 11.9% in Other regions ofRussia . ARPC dynamic in these customer segments was impacted by the acquisition of new customers, who initially have a lower ARPC, while the ARPC of the cohort of customers acquired beforeJanuary 1, 2018 has increased by 15.7% inMoscow and St. Petersburg and 19.8% in Other regions ofRussia , in both cases primarily driven by the increase in the average number of job postings per customer. ARPC in Small and Medium Accounts in Other regions ofRussia was positively affected by the slowdown in new paying customers’ intake, as compared to earlier of the year.
Operating Costs and Expenses (exclusive of depreciation and amortization)
Operating costs and expenses (exclusive of depreciation and amortization) were ₽1,143 million for the three months ended
(in thousands of RUB) | For the three months ended | For the twelve months ended December 31, | |||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||
Personnel expenses | (605,016 | ) | (447,637 | ) | 35.2 | % | (2,234,309 | ) | (1,717,467 | ) | 30.1 | % | |||||
Marketing expenses | (274,274 | ) | (207,986 | ) | 31.9 | % | (1,046,678 | ) | (939,717 | ) | 11.4 | % | |||||
Other general and administrative expenses: | |||||||||||||||||
Subcontractors and other expenses related to provision of services | (59,483 | ) | (65,468 | ) | (9.1 | )% | (186,337 | ) | (188,499 | ) | (1.1 | )% | |||||
Office rent and maintenance | (58,149 | ) | (70,557 | ) | (17.6 | )% | (206,501 | ) | (241,434 | ) | (14.5 | )% | |||||
Professional services | (52,371 | ) | (46,760 | ) | 12.0 | % | (347,963 | ) | (255,362 | ) | 36.3 | % | |||||
Insurance costs | (42,454 | ) | – | n/m | (111,251 | ) | – | n/m | |||||||||
Hosting and other web-site maintenance | (11,718 | ) | (8,905 | ) | 31.6 | % | (40,421 | ) | (32,825 | ) | 23.1 | % | |||||
Other operating expenses | (39,655 | ) | (16,669 | ) | 137.9 | % | (126,803 | ) | (57,556 | ) | 120.3 | % | |||||
Operating costs and expenses (exclusive of depreciation and amortization) | (1,143,120 | ) | (863,982 | ) | 32.3 | % | (4,300,263 | ) | (3,432,860 | ) | 25.3 | % |
Our personnel expenses, marketing expenses and insurance costs have increased as a percentage of revenue for the three months ended
For the three months ended December 31, | For the twelve months ended December 31, | ||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||
Personnel expenses | 29.3 | % | 26.6 | % | 2.7 | % | 28.7 | % | 28.1 | % | 0.6 | % | |||||
Marketing expenses | 13.3 | % | 12.4 | % | 0.9 | % | 13.4 | % | 15.4 | % | (1.9 | )% | |||||
Other general and administrative expenses: | |||||||||||||||||
Subcontractors and other expenses related to provision of services | 2.9 | % | 3.9 | % | (1.0 | )% | 2.4 | % | 3.1 | % | (0.7 | )% | |||||
Office rent and maintenance | 2.8 | % | 4.2 | % | (1.4 | )% | 2.7 | % | 3.9 | % | (1.3 | )% | |||||
Professional services | 2.5 | % | 2.8 | % | (0.2 | )% | 4.5 | % | 4.2 | % | 0.3 | % | |||||
Insurance services | 2.1 | % | – | 2.1 | % | 1.4 | % | – | 1.4 | % | |||||||
Hosting and other web-site maintenance | 0.6 | % | 0.5 | % | 0.1 | % | 0.5 | % | 0.5 | % | – | ||||||
Other operating expenses | 1.9 | % | 1.0 | % | 0.9 | % | 1.6 | % | 0.9 | % | 0.7 | % | |||||
Operating costs and expenses (exclusive of depreciation and amortization) | 55.3 | % | 51.3 | % | 4.0 | % | 55.2 | % | 56.1 | % | (0.9 | )% |
Personnel expenses
Personnel expenses increased by ₽157 million, or 35.2%, for the three months ended
Marketing expenses
Marketing expenses increased by ₽66 million, or 31.9%, for the three months ended
Other general and administrative expenses
Our insurance costs have increased by ₽42.5 million for the three months ended
Our office rent and maintenance expenses decreased by ₽12.4 million, or 17.6%, for the three months ended
Our other operating expenses increased by ₽23 million, mainly due to: (i) certain additional valuation allowances for value-added tax receivables provided in the fourth quarter of 2019; and (ii) an increase of travel expenses.
Net foreign exchange loss
Net foreign exchange loss was ₽22 million for the three months ended
Depreciation and amortization
Depreciation and amortization were P177.8 million for the three months ended
Finance income and costs
Finance income was ₽19 million for the three months ended
Finance costs were ₽133 million for the three months ended
Income tax expense
Income tax expense was
The decrease in income tax expense by
Net income
Net income was ₽496 million for the three months ended
Adjusted EBITDA
Adjusted EBITDA was ₽1,023 million for the three months ended
Adjusted Net Income
Adjusted Net Income was ₽713 million for 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 twelve months ended | |||||||
2019 | 2018 | Change | ||||||
Net cash generated from operating activities | 2,611,054 | 2,096,688 | 514,366 | |||||
Net cash used in investing activities | (637,117 | ) | (174,548 | ) | (462,569 | ) | ||
Net cash used in financing activities | (2,653,440 | ) | (497,629 | ) | (2,155,811 | ) | ||
Net (decrease)/increase in cash and cash equivalents | (679,503 | ) | 1,424,511 | (2,104,014 | ) | |||
Cash and cash equivalents, beginning of period | 2,861,110 | 1,416,008 | 1,445,102 | |||||
Cash and cash equivalents included in assets held for sale, beginning of period | – | 10,801 | (10,801 | ) | ||||
Effect of exchange rate changes on cash | (92,392 | ) | 9,790 | (102,182 | ) | |||
Cash and cash equivalents, end of period | 2,089,215 | 2,861,110 | (771,895 | ) |
Net cash generated from operating activities
For the twelve months ended
Net cash used in investing activities
For the twelve months ended
Net cash used in financing activities
For the twelve months ended
Capital Expenditures
Our additions to property and equipment and intangible assets in the twelve months ended
Financial Outlook
The following forward-looking statement reflects our expectations as of
We currently expect our revenue to grow in the range of 21% to 25% in the year 2020 compared to the year 2019 and our Adjusted EBITDA Margin to be between 50% and 52% for the year 2020.
This outlook reflects our current view, based on the trends that we see at this time, and may change in light of market and economic developments in the business sectors and jurisdictions in which we operate. For instance, our expectations do not include possible impact of COVID-19, as it is hard to estimate at this point whether such impact will occur, and its extent and duration.
Dividend
Our Board of Directors has approved payment of an interim dividend in 2020 of $0.50 per share, representing approximately 75% of our Adjusted Net Income for the year ended
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
The cut-off time to provide the Company with documents evidencing the right to receive tax relief under the Russian law or the applicable DTT is
Conference Call Information
We will host a conference call and webcast to discuss our results at
Fourth Quarter and Full-Year 2019 Financial Results Conference Call
To participate in the conference call, please use the following details:
+44 (0) 2071 928000 | |
+44 (0) 844 571 8892 | |
0800 376 7922 | |
+1631 510 7495 | |
1866 966 1396 | |
+7 495 249 9849 | |
810 800 235 75011 | |
Conference ID: | 5966416 |
Webcast:
https://edge.media-server.com/mmc/p/rvefurjx
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 adopted by the
- “Adjusted EBITDA” as net income (loss) plus: (1) income tax expense; (2) net interest expense/(income); (3) depreciation and amortization; (4) transaction costs related to business combinations; (5) (gain)/loss on the disposal of subsidiary; (6) transaction costs related to disposal of subsidiary; (7) expenses related to equity-settled awards, including related social taxes; (8) IPO-related costs; (9) insurance expenses related to the IPO; (10) (income) from the depositary; (11) one-off litigation settlement and related legal costs; and (12) share of (profit)/loss of equity-accounted investees.
- “Adjusted Net Income” as net income (loss) plus: (1) transaction costs related to business combinations; (2) (gain)/loss on the disposal of subsidiary; (3) transaction costs related to the disposal of subsidiary; (4) expenses related to equity-settled awards, including related social taxes; (5) IPO-related costs; (6) insurance expenses related to IPO; (7) (income) from the depositary; (8) one-off litigation settlement and related legal costs; (9) share of (profit)/loss of equity-accounted investees; (10) amortization of intangible assets recognized upon the acquisition by
HeadHunter Group PLC of the outstanding equity interests ofHeadHunter FSU Limited fromMail.Ru Group Limited ; (11) the tax effect of the adjustment described in (10); (12) (gain)/loss related to the remeasurement and expiration of a tax indemnification asset; - “Adjusted EBITDA Margin” as Adjusted EBITDA divided by revenue.
- “Adjusted Net Income Margin” as Adjusted Net Income divided by revenue.
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 to 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.
Net Debt and Net Debt to Adjusted EBITDA Ratio
Net Debt and Net Debt to Adjusted EBITDA Ratio are financial measure 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.
1 Denotes International Financial Reporting Standards as issued by the
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
Contact:
Roman Safiyulin
+ 7 966 005-17-82
Consolidated Statement of Income and Comprehensive Income
For the three and twelve months ended
(in thousands of RUB and USD, except per share amounts)
For the three months ended | For the twelve months ended | ||||||||||||||||
2018* | 2019 | 2019 | 2018* | 2019 | 2019 | ||||||||||||
RUB | RUB | USD | RUB | RUB | USD | ||||||||||||
Revenue | 1,682,628 | 2,066,358 | 33,379 | 6,117,773 | 7,788,741 | 125,816 | |||||||||||
Operating costs and expenses (exclusive of depreciation and amortization) | (863,982 | ) | (1,143,120 | ) | (18,466 | ) | (3,432,860 | ) | (4,300,263 | ) | (69,465 | ) | |||||
Depreciation and amortization | (146,699 | ) | (177,786 | ) | (2,872 | ) | (586,131 | ) | (683,317 | ) | (11,038 | ) | |||||
Operating income | 671,947 | 745,452 | 12,042 | 2,098,782 | 2,805,161 | 45,313 | |||||||||||
Finance income | 25,911 | 19,041 | 308 | 90,602 | 76,764 | 1,240 | |||||||||||
Finance costs | (160,305 | ) | (133,120 | ) | (2,150 | ) | (644,326 | ) | (603,280 | ) | (9,745 | ) | |||||
Other income | – | 10,309 | 167 | – | 23,853 | 385 | |||||||||||
Gain on disposal of subsidiary | – | – | – | 6,131 | – | – | |||||||||||
Net foreign exchange loss | (2,976 | ) | (21,778 | ) | (352 | ) | (8,742 | ) | (46,508 | ) | (751 | ) | |||||
Share of loss of equity-accounted investees (net of income tax) | – | (21,958 | ) | (355 | ) | – | (30,542 | ) | (493 | ) | |||||||
Profit before income tax | 534,577 | 597,946 | 9,659 | 1,542,447 | 2,225,448 | 35,949 | |||||||||||
Income tax expense | (145,726 | ) | (101,504 | ) | (1,640 | ) | (509,602 | ) | (644,422 | ) | (10,410 | ) | |||||
Net income for the period | 388,851 | 496,442 | 8,019 | 1,032,845 | 1,581,026 | 25,539 | |||||||||||
Attributable to: | |||||||||||||||||
Owners of the Company | 363,386 | 465,926 | 7,526 | 949,307 | 1,448,018 | 23,391 | |||||||||||
Non-controlling interest | 25,465 | 30,516 | 493 | 83,538 | 133,008 | 2,149 | |||||||||||
Comprehensive income/(loss) | |||||||||||||||||
Items that are or may be reclassified subsequently to profit or loss: | |||||||||||||||||
Foreign currency translation differences | 6,136 | (16,227 | ) | (262 | ) | 25,205 | (41,818 | ) | (676 | ) | |||||||
Total comprehensive income, net of tax | 394,987 | 480,215 | 7,757 | 1,058,050 | 1,539,208 | 24,864 | |||||||||||
Attributable to: | |||||||||||||||||
Owners of the Company | 369,473 | 450,442 | 7,276 | 974,756 | 1,408,597 | 22,754 | |||||||||||
Non-controlling interest | 25,514 | 29,773 | 481 | 83,294 | 130,611 | 2,110 | |||||||||||
Earnings per share | |||||||||||||||||
Basic (in Russian Roubles per share) | 7.27 | 9.32 | 0.15 | 18.99 | 28.96 | 0.47 | |||||||||||
Diluted (in Russian Roubles per share) | 7.27 | 9.04 | 0.15 | 18.99 | 28.42 | 0.46 |
* The Company has initially applied IFRS 16 at
Consolidated Statement of Financial Position
As at
(in thousands of RUB and USD) | 2019 | 2019 | ||||||
RUB | RUB | USD | ||||||
Non-current assets | ||||||||
| 6,989,255 | 6,954,183 | 112,335 | |||||
Intangible assets | 3,154,605 | 2,733,417 | 44,155 | |||||
Property and equipment | 133,810 | 429,744 | 6,942 | |||||
Equity-accounted investees | – | 178,847 | 2,889 | |||||
Right-of-use assets | – | 279,249 | 4,511 | |||||
Deferred tax assets | 92,094 | 149,835 | 2,420 | |||||
Other financial assets | – | 25,341 | 409 | |||||
Other non-current assets | 3,304 | 22,134 | 358 | |||||
Total non-current assets | 10,373,068 | 10,772,750 | 174,019 | |||||
Current assets | ||||||||
Trade and other receivables | 40,718 | 57,908 | 935 | |||||
Prepaid expenses and other current assets | 64,386 | 119,249 | 1,926 | |||||
Cash and cash equivalents | 2,861,110 | 2,089,215 | 33,748 | |||||
Total current assets | 2,966,214 | 2,266,372 | 36,610 | |||||
Total assets | 13,339,282 | 13,039,122 | 210,629 | |||||
Equity | ||||||||
Share capital | 8,547 | 8,547 | 138 | |||||
Share premium | 1,729,400 | 1,863,877 | 30,108 | |||||
Foreign currency translation reserve | (66,957 | ) | (105,191 | ) | (1,699 | ) | ||
Retained earnings | 1,302,981 | 1,587,697 | 25,647 | |||||
Total equity attributable to owners of the Company | 2,973,971 | 3,354,930 | 54,194 | |||||
Non-controlling interest | 29,449 | 33,263 | 537 | |||||
Total equity | 3,003,420 | 3,388,193 | 54,732 | |||||
Non-current liabilities | ||||||||
Loans and borrowings | 5,203,692 | 4,064,501 | 65,656 | |||||
Lease liabilities | – | 230,802 | 3,728 | |||||
Deferred tax liabilities | 1,070,240 | 512,804 | 8,284 | |||||
Trade and other payables | 13,967 | 4,239 | 68 | |||||
Provisions | 19,498 | 315 | ||||||
Other non-current liabilities | – | 126,828 | 2,049 | |||||
Total non-current liabilities | 6,287,899 | 4,958,672 | 80,100 | |||||
Current liabilities | ||||||||
Contract liabilities | 2,072,640 | 2,367,416 | 38,242 | |||||
Trade and other payables | 655,877 | 780,219 | 12,603 | |||||
Loans and borrowings (current portion) | 1,233,924 | 1,064,554 | 17,196 | |||||
Lease liabilities (current portion) | – | 59,816 | 966 | |||||
Income tax payable | 85,522 | 369,974 | 5,976 | |||||
Provisions | – | 26,398 | 426 | |||||
Other current liabilities | – | 23,880 | 386 | |||||
Total current liabilities | 4,047,963 | 4,692,257 | 75,797 | |||||
Total liabilities | 10,335,862 | 9,650,929 | 155,897 | |||||
Total equity and liabilities | 13,339,282 | 13,039,122 | 210,629 |
* The Group has initially applied IFRS 16 at
Consolidated Statement of Cash Flows
For the twelve months ended
(in thousands of RUB and USD) | |||||||||
2019 | 2019 | ||||||||
RUB | RUB | USD | |||||||
OPERATING ACTIVITIES: | |||||||||
Net income for the period | 1,032,845 | 1,581,026 | 25,539 | ||||||
Adjusted for non-cash items and items not affecting cash flow from operating activities: | |||||||||
Depreciation and amortization | 586,131 | 683,317 | 11,038 | ||||||
Net finance costs | 553,724 | 526,516 | 8,505 | ||||||
Net foreign exchange loss | 8,742 | 46,508 | 751 | ||||||
Gain on disposal of subsidiary | (6,131 | ) | – | – | |||||
Other non-cash items | 1,616 | 5,690 | 92 | ||||||
Management incentive agreement, including social taxes | 78,648 | 196,993 | 3,182 | ||||||
Share grant to Board | – | 12,842 | 207 | ||||||
Share of profit of equity-accounted investees, net of income tax | – | 30,542 | 493 | ||||||
Income tax expense | 509,602 | 644,422 | 10,410 | ||||||
Change in trade receivables and other operating assets | (8,029 | ) | (90,218 | ) | (1,457 | ) | |||
Change in contract liabilities | 600,469 | 307,388 | 4,965 | ||||||
Change in trade and other payables | 56,877 | 76,418 | 1,234 | ||||||
Change in other liabilities | – | 147,685 | 2,386 | ||||||
Income tax paid | (693,803 | ) | (975,655 | ) | (15,760 | ) | |||
Interest paid | (624,003 | ) | (582,420 | ) | (9,408 | ) | |||
Net cash generated from operating activities | 2,096,688 | 2,611,054 | 42,178 | ||||||
INVESTING ACTIVITIES: | |||||||||
Acquisition of equity-accounted investment | – | (234,730 | ) | (3,792 | ) | ||||
Proceeds from disposal of subsidiary, net of cash disposed of | (10,847 | ) | – | – | |||||
Acquisition of intangible assets | (134,702 | ) | (97,818 | ) | (1,580 | ) | |||
Acquisition of property and equipment | (119,942 | ) | (381,648 | ) | (6,165 | ) | |||
Interest received | 90,943 | 77,079 | 1,245 | ||||||
Net cash used in investing activities | (174,548 | ) | (637,117 | ) | (10,292 | ) | |||
FINANCING ACTIVITIES: | |||||||||
Bank and other loans received | 270,000 | – | – | ||||||
Bank and other loans repaid | (690,000 | ) | (1,325,000 | ) | (21,404 | ) | |||
Payment for lease liabilities | – | (61,376 | ) | (991 | ) | ||||
Dividends paid to shareholders | – | (1,133,501 | ) | (18,310 | ) | ||||
Dividends paid to non-controlling interest | (77,629 | ) | (131,456 | ) | (2,123 | ) | |||
Acquisition of non-controlling interest | – | (2,107 | ) | (34 | ) | ||||
Net cash used in financing activities | (497,629 | ) | (2,653,440 | ) | (42,863 | ) | |||
Net increase/(decrease) in cash and cash equivalents | 1,424,511 | (679,503 | ) | (10,976 | ) | ||||
Cash and cash equivalents, beginning of period | 1,416,008 | 2,861,110 | 46,217 | ||||||
Cash and cash equivalents included in assets held for sale, beginning of period | 10,801 | – | – | ||||||
Effect of exchange rate changes on cash | 9,790 | (92,392 | ) | (1,492 | ) | ||||
Cash and cash equivalents, end of period | 2,861,110 | 2,089,215 | 33,748 |
* The Group has initially applied IFRS 16 at
Reconciliations of non-IFRS financial measures to the nearest comparable IFRS measures
Reconciliation of net income to EBITDA and Adjusted EBITDA, the most directly comparable IFRS financial measure:
(in thousands of RUB)
For the three months ended | For the twelve months ended | |||||||||
2018 | 2019 | 2018 | 2019 | |||||||
Net income | 388,851 | 496,442 | 1,032,845 | 1,581,026 | ||||||
Add the effect of: | ||||||||||
Income tax expense | 145,726 | 101,504 | 509,602 | 644,422 | ||||||
Net interest costs | 134,394 | 114,079 | 553,724 | 526,516 | ||||||
Depreciation and amortization | 146,699 | 177,786 | 586,131 | 683,317 | ||||||
EBITDA | 815,670 | 889,811 | 2,682,302 | 3,435,281 | ||||||
Add the effect of: | ||||||||||
Gain on disposal of subsidiary(1) | – | – | (6,131 | ) | – | |||||
Equity-settled awards, including related social taxes(2) | 13,015 | 61,891 | 68,776 | 178,953 | ||||||
IPO-related costs(3) | 9,168 | 1,990 | 110,043 | 190,284 | ||||||
Insurance cover related to IPO(4) | – | 38,175 | – | 100,048 | ||||||
Income from depository(5) | – | (8,551 | ) | – | (22,095 | ) | ||||
One-off litigation settlements and legal costs(6) | – | 17,734 | – | 17,734 | ||||||
Share of loss of equity-accounted investees(7) | – | 21,958 | – | 30,542 | ||||||
Adjusted EBITDA | 837,853 | 1,023,008 | 2,854,990 | 3,930,747 |
(1) On
(2) 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
(3) In connection with our IPO, we incurred expenses related to legal, accounting and other professional fees that are not indicative of our ongoing expenses.
(4) Subsequent to and in connection with our IPO, we purchased a one-year insurance policy for
(5) 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.
(6) Represents one-off litigation costs related to administrative proceeding with the Federal Antimonopoly Service of
(7) On
Reconciliation of net income to Adjusted Net Income, the most directly comparable IFRS financial measure:
For the three months ended | For the twelve months ended | ||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||
Net income | 388,851 | 496,442 | 1,032,845 | 1,581,026 | |||||||
Add the effect of: | |||||||||||
Gain on disposal of subsidiary(1) | – | – | (6,131 | ) | – | ||||||
Equity-settled awards (2) | 13,015 | 61,891 | 68,776 | 178,953 | |||||||
IPO-related costs(3) | 9,168 | 1,990 | 110,043 | 190,284 | |||||||
Insurance cover related to IPO(4) | – | 38,175 | – | 100,048 | |||||||
Income from depositary(5) | – | (8,551 | ) | – | (22,095 | ) | |||||
One-off litigation settlements and legal costs(6) | – | 17,734 | – | 17,734 | |||||||
Share of loss of equity-accounted investees(7) | – | 21,958 | – | 30,542 | |||||||
Amortization of intangible assets recognized upon the Acquisition(8) | 103,947 | 103,947 | 415,787 | 415,787 | |||||||
Tax effect on adjustments(9) | (20,789 | ) | (20,789 | ) | (83,157 | ) | (83,157 | ) | |||
Adjusted Net Income | 494,192 | 712,797 | 1,538,163 | 2,409,122 |
(1) On
(2) 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
(3) In connection with our IPO, we incurred expenses related to legal, accounting and other professional fees that are not indicative of our ongoing expenses.
(4) Subsequent to and in connection with our IPO, we purchased a one-year insurance policy for
(5) 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.
(6) Represents one-off litigation costs related to administrative proceeding with the Federal Antimonopoly Service of
(7) On
(8) As a result of the Acquisition, we recognized the following intangible assets: (i) trademark and domain names in the amount of ₽1,634,306 thousand, (ii) non-contractual customer relationships in the amount of ₽2,064,035 thousand and (iii) CV database in the amount of ₽618,601 thousand, which have a useful life of 10 years, 5-10 years and 10 years, respectively.
(9) Calculated by applying the statutory Russian tax rate of 20% to amortization of the assets recognized upon the Acquisition.
We believe that
Calculation of our
(in thousands of RUB) | 2019 | ||||
Trade and other receivables | 57,908 | 40,718 | |||
Prepaid expenses and other current assets | 119,249 | 64,386 | |||
Contract liabilities | (2,367,416 | ) | (2,072,640 | ) | |
Trade and other payables | (780,219 | ) | (655,877 | ) | |
Other current liabilities | (23,880 | ) | – | ||
(2,994,358 | ) | (2,623,413 | ) |
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) | 2019 | ||||
Loans and borrowings | 4,064,501 | 5,203,692 | |||
Loans and borrowings (current portion) | 1,064,554 | 1,233,924 | |||
Cash and cash equivalents | (2,089,215 | ) | (2,861,110 | ) | |
Net Debt | 3,039,840 | 3,576,506 |
We calculate our Net Debt to Adjusted EBITDA Ratio by dividing Net Debt by Adjusted EBITDA.
Net Debt | 3,039,840 | 3,576,506 | |
Adjusted EBITDA | 3,930,747 | 2,854,990 | |
Net Debt to Adjusted EBITDA Ratio | 0.8 | 1.3 |
A pdf to accompany this release can be downloaded at: http://ml.globenewswire.com/Resource/Download/99ac8bff-bbce-426a-b321-75d6ef895086
Source:
2020 GlobeNewswire, Inc., source