QIWI Announces First Quarter 2023 Financial Results – Form 6-K
QIWI Announces First Quarter 2023 Financial Results
1Q 2023 key operating and financial highlights1 2
| 1Q 2022 | 1Q 2023 | 1Q 2023 | ||||||||||||||||
| RUB million | RUB million | YoY | USD million(1) | |||||||||||||||
| Revenue | 9,717 | 17,872 | 83.9 | % | 231.8 | |||||||||||||
| Total Net Revenue | 6,305 | 8,552 | 35.6 | % | 110.9 | |||||||||||||
| Adjusted EBITDA | 3,687 | 4,479 | 21.5 | % | 58.1 | |||||||||||||
| results | Adjusted EBITDA margin | 58.5 | % | 52.4 | % | (6.1 | )p.p. | 52.4 | % | |||||||||
| Profit for the period | 2,257 | 4,499 | 99.3 | % | 58.4 | |||||||||||||
| Adjusted Net profit | 2,326 | 4,180 | 79.7 | % | 54.1 | |||||||||||||
| Adjusted Net profit margin | 36.9 | % | 48.9 | % | 12.0 | p.p. | 48.9 | % | ||||||||||
| Net Revenue | 5,649 | 6,944 | 22.9 | % | 90.1 | |||||||||||||
| Payment Net Revenue | 4,119 | 5,085 | 23.5 | % | 66.0 | |||||||||||||
| Payment Volume, billion | 356 | 469 | 31.6 | % | 6.1 | |||||||||||||
| Payment Services (PS) | Payment Net Revenue Yield | 1.16 | % | 1.08 | % | (0.1 | )p.p. | 1.08 | % | |||||||||
| Other Net Revenue | 1,530 | 1,859 | 21.5 | % | 24.1 | |||||||||||||
| Adjusted Net profit | 3,029 | 3,536 | 16.7 | % | 45.9 | |||||||||||||
| Adjusted Net profit margin | 53.6 | % | 50.9 | % | (2.7 | )p.p. | 50.9 | % | ||||||||||
| Net Revenue | 157 | 741 | 372.5 | % | 9.6 | |||||||||||||
| Digital Marketing (DM) | Adjusted Net profit | 30 | 116 | 286.6 | % | 1.5 | ||||||||||||
| Adjusted Net profit margin | 19.1 | % | 15.7 | % | (3.5 | )p.p. | 15.7 | % | ||||||||||
| Corporate and Other (CO) | Net Revenue | 499 | 867 | 73.7 | % | 11.2 | ||||||||||||
| Adjusted Net profit | (733 | ) | 528 | (172.0 | )% | 6.8 |
| (1) | Throughout this release dollar translation is calculated using a rouble to |
| (2) | Throughout this release, following the introduction of new Digital Marketing segment, certain amounts related to Flocktory have been reclassified from Corporate and Other to Digital Marketing segment to conform to the current period presentation. |
Key events after the reported period
| · |
| · |
| · |
1 Total Net Revenue, adjusted EBITDA, adjusted EBITDA margin, adjusted Net profit, and adjusted Net profit margin in this release are "non-IFRS financial measures". Please see the section "Non-IFRS Financial Measures and Supplemental Financial Information" for more details as well as a reconciliation to IFRS reported numbers at the end of this release.
2 Throughout this release calculations of totals, subtotals and/or percentage change may have small variations due to rounding of decimals.
3https://investor.qiwi.com/news-and-events/press-releases/4108553/
4https://investor.qiwi.com/news-and-events/press-releases/4108554/
5https://investor.qiwi.com/results-and-reports/sec-filings/4091022
6https://investor.qiwi.com/news-and-events/press-releases/4108564/
1Q 2023 results
Net Revenue breakdown by segments
| 1Q 2022 | 1Q 2023 | 1Q 2023 | ||||||||||||||
| RUB million | RUB million | YoY | USD million | |||||||||||||
| Total Net Revenue | 6,305 | 8,552 | 35.6 | % | 110.9 | |||||||||||
| Payment Services (PS) | 5,649 | 6,944 | 22.9 | % | 90.1 | |||||||||||
| PS Payment | 4,119 | 5,085 | 23.5 | % | 66.0 | |||||||||||
| PS Other | 1,530 | 1,859 | 21.5 | % | 24.1 | |||||||||||
| Digital Marketing (DM) | 157 | 741 | 372.5 | % | 9.6 | |||||||||||
| Corporate and Other (CO) | 499 | 867 | 73.7 | % | 11.2 |
Total Net Revenue increased by 35.6% YoY to
Payment Services
PS Net Revenue increased by 22.9% YoY to
PS Payment Net Revenue was 23.5% higher YoY and amounted to
PS Payment Volume was
PS Payment Net Revenue Yield slightly decreased from 1.16% to 1.08% as a result of adverse mix effect being a higher share of operations with lower yields.
PS Other Net Revenue primarily comprises revenue from fees for inactive accounts and unclaimed payments, interest revenue, cash and settlement services and related conversion income, fees for intercompany and third-party funding, and advertising fees. In 1Q 2023 PS Other Net Revenue increased by 21.5% YoY to
Digital Marketing (DM)
In
With additional focus on this growing market, in 2023
DM Net Revenue increased by 372.5% YoY to
DM market has unique features which differ significantly from payment services. In comparison to the PS segment, DM's Net Revenue Yield is lower and operating expenses (predominantly represented by personnel expenses) as a percentage of Net revenue are higher. Therefore, an increase in the share of DM segment in Group results has a margin-dilutive effect.
7https://investor.qiwi.com/news-and-events/press-releases/4108557/
Corporate and Other (CO)
| 1Q 2022 | 1Q 2023 | 1Q 2023 | ||||||||||||||
| RUB million | RUB million | YoY | USD million | |||||||||||||
| CO Net Revenue | 499 | 867 | 73.7 | % | 11.2 | |||||||||||
| ROWI | 370 | 595 | 61.1 | % | 7.7 | |||||||||||
| Tochka | 106 | - | (100.0 | )% | - | |||||||||||
| Corporate and Other projects | 24 | 272 | 1024.9 | % | 3.5 |
CO Net Revenue increased by 73.7% YoY to
| · | ROWI Net Revenue growth by 61.1% YoY to |
| o | As of |
| o | As of |
| o | As of |
| o | In 1Q 2023, the share of ROWI Net Revenue in Total Net Revenue was 7.0% growing 1.1 ppts YoY. |
| · | Tochka project was closed after the disposal of our stake in the JSC Tochka associate. We continue our collaboration with Tochka on an arms-length basis and provide a bundle of cash settlement services accounted for within PS Other Net Revenue. |
| · | Corporate and Other projects Net Revenue in 1Q 2023 amounted to |
Operating expenses and other non-operating income and expenses
| 1Q 2022 | 1Q 2023 | 1Q 2023 | |||||||
| RUB million | RUB million | YoY | USD million | ||||||
| Operating expenses | (2,895 | ) | (4,382 | ) | 51.4 | % | (56.8 | ) | |
| % of Net Revenue | (45.9 | )% | (51.2 | )% | (5.3 | )p.p. | |||
| Selling, general and administrative expenses | (771 | ) | (959 | ) | 24.4 | % | (12.4 | ) | |
| % of Net Revenue | (12.2 | )% | (11.2 | )% | 1.0 | p.p. | |||
| Personnel expenses | (1,673 | ) | (2,751 | ) | 64.4 | % | (35.7 | ) | |
| % of Net Revenue | (26.5 | )% | (32.2 | )% | (5.6 | )p.p. | |||
| Depreciation, amortization & impairment | (277 | ) | (309 | ) | 11.6 | % | (4.0 | ) | |
| % of Net Revenue | (4.4 | )% | (3.6 | )% | 0.8 | p.p. | |||
| Credit loss (expense) | (174 | ) | (363 | ) | 108.6 | % | (4.7 | ) | |
| % of Net Revenue | (2.8 | )% | (4.2 | )% | (1.5 | )p.p. | |||
| Other non-operating income and expenses | (352 | ) | 1,220 | (446.6 | )% | 10.3 | |||
| % of Net Revenue | (5.6 | )% | 14.3 | % | 19.8 | p.p. | |||
| Share of gain of an associate and a joint venture | - | (39 | ) | (0.5 | ) | ||||
| % of Net Revenue | 0.0 | % | (0.5 | )% | (0.5 | )p.p. | |||
| Foreign exchange gain/(loss), net | (441 | ) | 819 | (285.7 | )% | 10.6 | |||
| % of Net Revenue | (7.0 | )% | 9.6 | % | 16.6 | p.p. | |||
| Interest income and expenses, net | 68 | - | (100.0 | )% | - | ||||
| % of Net Revenue | 1.1 | % | 0.0 | % | (1.1 | )p.p. | |||
| Other income and expenses, net | 21 | 16 | 23.8 | % | 0.2 | ||||
| % of Net Revenue | 0.3 | % | 0.2 | % | (0.1 | )p.p. | |||
| Gain on disposal of an associate | - | 424 | - | ||||||
| % of Net Revenue | 0.0 | % | 5.0 | % | 5.0 | p.p. |
Operating expenses increased by 51.4% YoY to
Selling, general and administrative expenses increased by 24.4% to
Personnel expenses surged by 64.4% YoY to
Depreciation, amortization and impairment stood at
Credit loss increased to 4.2% as a percentage of Total Net Revenue or
Other non-operating income increased to
Income tax expense
Income tax expense increased by 11.2% YoY to
Profitability results
| 1Q 2022 | 1Q 2023 | 1Q 2023 | ||||||||||||||
| RUB million | RUB million | YoY | USD million | |||||||||||||
| Adjusted EBITDA | 3,687 | 4,479 | 21.5 | % | 58.1 | |||||||||||
| Adjusted EBITDA margin, % | 58.5 | % | 52.4 | % | (6.1 | )p.p. | 52.4 | % | ||||||||
| Adjusted Net Profit | 2,326 | 4,180 | 79.7 | % | 54.1 | |||||||||||
| Adjusted Net Profit margin, % | 36.9 | % | 48.9 | % | 12.0 | p.p. | 48.9 | % | ||||||||
| Payment Services | 3,029 | 3,536 | 16.7 | % | 45.9 | |||||||||||
| PS Adjusted Net Profit margin, % | 53.6 | % | 50.9 | % | (2.7 | )p.p. | 50.9 | % | ||||||||
| Digital Marketing (DM) | 30 | 116 | 286.6 | % | 1.5 | |||||||||||
| DM Adjusted Net Profit margin, % | 19.1 | % | 15.7 | % | (3.5 | )p.p. | 15.7 | % | ||||||||
| Corporate and Other (CO) | (733 | ) | 528 | (172.0 | )% | 6.8 | ||||||||||
| Tochka | (15 | ) | - | (100.0 | )% | - | ||||||||||
| ROWI | 51 | 184 | 259.9 | % | 2.4 | |||||||||||
| Corporate and Other projects | (769 | ) | 344 | (144.8 | )% | 4.5 |
Adjusted EBITDA increased by 21.5% YoY to
Adjusted Net Profit increased by 79.7% YoY to
Payment Services Adjusted Net Profit increased by 16.7% YoY to
Digital Marketing (DM) Adjusted Net Profit for 1Q 2023 increased to
CO Adjusted Net Profit increased to
| · | CO Net Profit of |
| · | ROWI Net Profit growth to |
Dividends
Due to the lingering stock market infrastructure issues resulting from the introduction of European sanctions against the Russian National Settlement Depositary, the Company does not see the opportunity to arrange the distribution of dividends or repurchase shares with the equal treatment of all existing shareholders. Therefore, the Board decided to keep the distribution of dividends under review until changes of the sanction regime in respect of the Russian National Settlement Depositary or other developments that may enable the Company to distribute dividends to all of its shareholders.
Earnings Conference Call and Audio Webcast
Given the persisting level of uncertainty and market volatility, there will be no conference call or webcast to discuss the results. We welcome all our stakeholders to send any questions related to our business using the contact details available on our investor's website. We remain available for individual incoming call requests.
About
For the FY 2022
For more information, visit investor.qiwi.com.
Contact
Investor Relations
+357.25028091
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding expected total net revenue, adjusted net profit and net revenue yield, dividend payments, payment volume growth, growth of physical and virtual distribution channels, trends in each of our market verticals and statements regarding the development of our ROWI, RealWeb, Flocktory and other projects, the impact of recent sanctions targeting
Consolidated Statement of Financial Position
(in millions)
| As of |
As of |
As of |
||||||||||
| 2021 | 2022 | 2022 | ||||||||||
| RUB | RUB | USD | ||||||||||
| Assets | ||||||||||||
| Non-current assets | ||||||||||||
| Property and equipment | 1,163 | 1,055 | 13.7 | |||||||||
| 13,126 | 13,075 | 169.6 | ||||||||||
| Investments in associates | 303 | 270 | 3.5 | |||||||||
| Long-term debt securities | 2,946 | 4,088 | 53.0 | |||||||||
| Long-term loans issued | 843 | 613 | 8.0 | |||||||||
| Other non-current assets | 257 | 243 | 3.2 | |||||||||
| Deferred tax assets | 208 | 282 | 3.7 | |||||||||
| Total non-current assets | 18,846 | 19,626 | 254.6 | |||||||||
| Current assets | ||||||||||||
| Trade and other receivables | 15,194 | 12,715 | 164.9 | |||||||||
| Short-term loans issued | 14,200 | 13,339 | 173.0 | |||||||||
| Short-term debt securities | 14,029 | 15,321 | 198.8 | |||||||||
| Other current assets | 2,195 | 3,086 | 40.0 | |||||||||
| Cash and cash equivalents | 47,462 | 47,515 | 616.4 | |||||||||
| Total current assets | 93,080 | 91,976 | 1,193.2 | |||||||||
| Total assets | 111,926 | 111,602 | 1,447.8 | |||||||||
| Equity and liabilities | ||||||||||||
| Equity attributable to equity holders of the parent | ||||||||||||
| Share capital | 1 | 1 | 0.01 | |||||||||
| Additional paid-in capital | 1,876 | 1,876 | 24.3 | |||||||||
| Share premium | 12,068 | 12,068 | 156.6 | |||||||||
| Other reserves | 2,696 | 2,713 | 35.2 | |||||||||
| Retained earnings | 39,941 | 44,282 | 574.4 | |||||||||
| Translation reserve | 401 | 37 | 0.5 | |||||||||
| Total equity attributable to equity holders of the parent | 56,983 | 60,977 | 791.0 | |||||||||
| Non-controlling interests | 912 | 1022 | 13.3 | |||||||||
| Total equity | 57,895 | 61,999 | 804.3 | |||||||||
| Non-current liabilities | ||||||||||||
| Long-term deferred income | 1,154 | 1,097 | 14.2 | |||||||||
| Long-term lease liabilities | 133 | 108 | 1.4 | |||||||||
| Other non-current liabilities | 156 | 48 | 0.6 | |||||||||
| Deferred tax liabilities | 1,847 | 1,691 | 21.9 | |||||||||
| Total non-current liabilities | 3,290 | 2,944 | 38.2 | |||||||||
| Current liabilities | ||||||||||||
| Trade and other payables | 33,048 | 28,469 | 369.3 | |||||||||
| Customer accounts and amounts due to banks | 11,203 | 11,883 | 154.2 | |||||||||
| Short-term debt | 3,922 | 3,781 | 49.0 | |||||||||
| Short-term lease liabilities | 300 | 302 | 3.9 | |||||||||
| Other current liabilities | 2,268 | 2,224 | 28.9 | |||||||||
| Total current liabilities | 50,741 | 46,659 | 605.3 | |||||||||
| Total equity and liabilities | 111,926 | 111,602 | 1,447.8 |
Consolidated Statement of Comprehensive Income
(in millions, except per share data)
| Three months ended | ||||||||||||
| RUB | RUB | USD | ||||||||||
| Revenue: | 9,717 | 17,872 | 231.8 | |||||||||
| Revenue from contracts with customers | 7,810 | 15,728 | 204.0 | |||||||||
| Interest revenue calculated using the effective interest rate | 1,452 | 1,764 | 22.9 | |||||||||
| Fees from inactive accounts and unclaimed payments | 455 | 380 | 4.9 | |||||||||
| Operating costs and expenses: | (6,307 | ) | (13,702 | ) | (177.7 | ) | ||||||
| Cost of revenue (exclusive of items shown separately below) | (3,412 | ) | (9,320 | ) | (120.9 | ) | ||||||
| Selling, general and administrative expenses | (771 | ) | (959 | ) | (12.4 | ) | ||||||
| Personnel expenses | (1,673 | ) | (2,751 | ) | (35.7 | ) | ||||||
| Depreciation and amortization | (277 | ) | (309 | ) | (4.0 | ) | ||||||
| Credit loss expense | (174 | ) | (363 | ) | (4.7 | ) | ||||||
| Profit from operations | 3,410 | 4,170 | 54.1 | |||||||||
| Gain on disposal of subsidiary | - | 424 | 5.5 | |||||||||
| Share of loss of an associate | - | (39 | ) | (0.5 | ) | |||||||
| Foreign exchange gain/(loss), net | (441 | ) | 819 | 10.6 | ||||||||
| Interest income and expenses, net | 68 | - | - | |||||||||
| Other income and expenses, net | 21 | 16 | 0.2 | |||||||||
| Profit before tax | 3,058 | 5,390 | 69.9 | |||||||||
| Income tax expense | (801 | ) | (891 | ) | (11.6 | ) | ||||||
| Net profit | 2,257 | 4,499 | 58.4 | |||||||||
| Attributable to: | ||||||||||||
| Equity holders of the parent | 2,174 | 4,341 | 56.3 | |||||||||
| Non-controlling interests | 83 | 158 | 2.0 | |||||||||
| Other comprehensive (loss)/income | ||||||||||||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods: | ||||||||||||
| Foreign currency translation: | ||||||||||||
| Exchange differences on translation of foreign operations | (12 | ) | 70 | 0.9 | ||||||||
| Net gain recycled to profit or loss upon disposal | - | (424 | ) | (5.5 | ) | |||||||
| Debt securities at fair value through other comprehensive income (FVOCI): | ||||||||||||
| Net losses arising during the period, net of tax | (854 | ) | 13 | 0.2 | ||||||||
| Share of other comprehensive Income of an associate | - | 4 | 0.1 | |||||||||
| Total other comprehensive income/(loss), net of tax | (866 | ) | (337 | ) | (4.4 | ) | ||||||
| Total comprehensive income, net of tax | 1,391 | 4,162 | 54.0 | |||||||||
| Attributable to: | ||||||||||||
| Equity holders of the parent | 1,309 | 3,994 | 51.8 | |||||||||
| Non-controlling interests | 82 | 168 | 2.2 | |||||||||
| Earnings per share: | ||||||||||||
| Basic, earnings attributable to ordinary equity holders of the parent | 34.81 | 69.22 | 0.90 | |||||||||
| Diluted, earnings attributable to ordinary equity holders of the parent | 34.81 | 69.22 | 0.90 |
Consolidated Statement of Cash Flows
(in millions)
2022 |
2023 |
2023 |
||||||||||
| RUB | RUB | |||||||||||
| Operating activities | ||||||||||||
| Profit before tax | 3,058 | 5,390 | 69.9 | |||||||||
| Adjustments to reconcile profit before tax to net cash flows (used in) /generated from operating activities | ||||||||||||
| Depreciation and amortization | 277 | 309 | 4.0 | |||||||||
| Foreign exchange loss/(gain), net | 441 | (819 | ) | (10.6 | ) | |||||||
| Interest income, net | (1,400 | ) | (1,686 | ) | (21.9 | ) | ||||||
| Credit loss expense | 174 | 363 | 4.7 | |||||||||
| Share of loss of an associate | - | 39 | 0.5 | |||||||||
| Gain on disposal of an associate | - | (424 | ) | (5.5 | ) | |||||||
| Other | - | (55 | ) | (0.7 | ) | |||||||
| Net cash flow generated from operating activities before changes in working capital | 2,550 | 3,117 | 40.4 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Decrease in trade and other receivables | 1,917 | 2,503 | 32.5 | |||||||||
| Decrease/(Increase) in other assets | 510 | (856 | ) | (11.1 | ) | |||||||
| Increase in customer accounts and amounts due to banks | 2,205 | 411 | 5.3 | |||||||||
| Decrease in accounts payable and accruals | (6,657 | ) | (5,176 | ) | (67.1 | ) | ||||||
| (Decrease)/Increase in other liabilities | 238 | (209 | ) | (2.7 | ) | |||||||
| Decrease in loans issued as operating activity | 128 | 968 | 12.6 | |||||||||
| Cash generated from operations | 891 | 758 | 9.8 | |||||||||
| Interest received | 1,750 | 1,970 | 25.6 | |||||||||
| Interest paid | (138 | ) | (96 | ) | (1.2 | ) | ||||||
| Income tax paid | (893 | ) | (1,190 | ) | (15.4 | ) | ||||||
| Net cash flow generated from operating activities | 1,610 | 1,442 | 18.7 | |||||||||
| Investing activities | ||||||||||||
| Cash used in business combinations | (215 | ) | (21 | ) | (0.3 | ) | ||||||
| Purchase of property and equipment | (111 | ) | (17 | ) | (0.2 | ) | ||||||
| Purchase of intangible assets | (39 | ) | (33 | ) | (0.4 | ) | ||||||
| Proceeds from sale of fixed and intangible assets | - | 8 | 0.1 | |||||||||
| Loans issued | - | (15 | ) | (0.2 | ) | |||||||
| Repayment of loans issued | 17 | 62 | 0.8 | |||||||||
| Purchase of debt securities | (1,737 | ) | (4,132 | ) | (53.6 | ) | ||||||
| Proceeds from sale and redemption of debt securities | - | 1,627 | 21.1 | |||||||||
| Net cash used in investing activities | (2,085 | ) | (2,521 | ) | (32.7 | ) | ||||||
| Financing activities | - | |||||||||||
| Repayment of debt | (155 | ) | (133 | ) | (1.7 | ) | ||||||
| Payment of principal portion of lease liabilities | (18 | ) | (28 | ) | (0.4 | ) | ||||||
| Dividends paid to non-controlling shareholders | (95 | ) | (51 | ) | (0.7 | ) | ||||||
| Net cash used in financing activities | (268 | ) | (212 | ) | (2.8 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (531 | ) | 1,344 | 17.4 | ||||||||
| Effect of change in ECL on cash and cash equivalents | (38 | ) | - | - | ||||||||
| Net increase/(decrease) in cash and cash equivalents | (1,312 | ) | 53 | 0.7 | ||||||||
| Cash and cash equivalents at the beginning of year | 33,033 | 47,462 | 615.7 | |||||||||
| Cash and cash equivalents at the end of year | 31,721 | 47,515 | 616.4 |
Non-IFRS Financial Measures and Supplemental Financial Information
This release presents Total Net Revenue, Payment Services (PS) Net Revenue, PS Payment Net Revenue, PS Other Net Revenue, Digital Marketing (DM) Net Revenue, Corporate and Other (CO) Net Revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Profit, PS Adjusted Net Profit, DM Adjusted Net Profit, CO Adjusted Net Profit, and Adjusted Net Profit per share, which are non-IFRS financial measures. You should not consider these non-IFRS financial measures as substitutes for or superior to revenue, in the case of Total Net Revenue, PS Net Revenue, PS Payment Net Revenue, PS Other Net Revenue, DM Net Revenue, CO Net Revenue; Net Profit, in the case of Adjusted EBITDA, Adjusted Net Profit, PS Adjusted Net Profit, DM Adjusted Net Profit, CO Adjusted Net Profit, and earnings per share, in the case of Adjusted Net Profit per share, each prepared in accordance with IFRS.
Furthermore, because these non-IFRS financial measures are not determined in accordance with IFRS, they are susceptible to varying calculations and may not be comparable to other similarly titled measures presented by other companies.
We define non-IFRS financial measures as follows:
| · | "Total Net Revenue" is calculated by subtracting cost of revenue from revenue. |
| · | "Adjusted EBITDA" as Net profit plus/(less): (1) depreciation and amortization, (2) other expenses/(income), (3) foreign exchange loss/(gain), (4) share of loss/(gain) of associates and joint ventures, (5) interest expenses/ (income), (6) income tax expenses, (7) share-based payment expenses, (8) impairment of non-current assets, (9) loss/(gain) on disposal of subsidiary. |
| · | "Adjusted Net profit" as Net profit plus/(less): (1) fair value adjustments recorded on business combinations and their amortization, (2) impairment of non-current assets, (3) share-based payment expenses, (4) loss/(gain) on disposal of subsidiary, (5) effect of taxation of the above items. |
| · | "Adjusted EBITDA Margin" as Adjusted EBITDA divided by Total Net Revenue. |
| · | "Adjusted Net profit Margin" as Adjusted Net profit divided by Total Net Revenue. |
Total Net Revenue is a key measure used by management to observe our operational profitability since it reflects our portion of the revenue net of fees that we pass through, primarily to our agents and other reload channels providers. In addition, under IFRS, most types of fees are presented on a gross basis whereas certain types of fees are presented on a net basis. Therefore, in order to analyze our two sources of payment processing fees on a comparative basis, management reviews Total Net Revenue.
We provide a breakdown of Total Net Revenue by segments - PS Net Revenue, including PS Payment Net Revenue and PS Other Net Revenue, DM Net Revenue, CO Net Revenue. We define the above measures as follows:
| · | PS Payment Net Revenue is the Net Revenue comprising the merchant and consumer fees collected for the payment transactions. |
| · | PS Other Net Revenue primarily comprises revenue from fees for inactive accounts and unclaimed payments, interest revenue, cash and settlement services and related conversion income, fees for intercompany and third-party funding, and advertising fees. |
| · | DM Net Revenue includes revenue generated with services provided for context and media advertising management services, including platform services under subscription, social network presence, programmatic, CPA and mobile marketing type of services. The segment includes results of full-cycle digital marketing service provider RealWeb and Flocktory services in marketing automation and advertising technologies. |
| · | CO Net Revenue comprises from results of ROWI business, Tochka project (before 2Q2022) and Corporate and Other projects, including interest income. |
Adjusted EBITDA is a key measure used by management as a supplemental performance measure that facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting interest expenses, net), changes in foreign exchange rates that impact financial assets and liabilities denominated in currencies other than our functional currency (affecting foreign exchange (loss)/gain, net), tax positions (such as the impact on periods or companies of changes in effective tax rates), the age and book depreciation of fixed assets (affecting relative depreciation expense), non-cash charges (affecting share-based payments expenses and impairment of non-current assets), and certain one-time income and expenses (affecting other income, offering and related expenses, etc.). Adjusted EBITDA also excludes other expenses, share in losses of associates and impairment of investment in associates because we believe it is helpful to view the performance of our business excluding the impact of entities that we do not control, and because our share of the net income (loss) of associates and other expenses includes items that have been excluded from Adjusted EBITDA (such as finance expenses, net, income tax, and depreciation and amortization). Because Adjusted EBITDA facilitates internal comparisons of operating performance on a more consistent basis, we also use Adjusted EBITDA in measuring our performance relative to that of our competitors.
Adjusted Net Profit is a key measure used by management to observe the operational profitability of the company. We believe Adjusted Net Profit is useful to an investor in evaluating our operating performance because it measures a company's operating performance without the effect of non-recurring items or items that are not core to our operations. For example, loss on disposals of subsidiaries and the effects of deferred taxation on excluded items do not represent the core operations of the business, and fair value adjustments recorded on business combinations and their amortization, impairment of non-current assets and share-based payments expenses do not have a substantial cash effect. Nevertheless, such gains and losses can affect our financial performance.
In order to reflect the operational profitability of each segment, we provide a following breakdown of Adjusted Net Profit: Payment Services Adjusted Net Profit, Digital Marketing Adjusted Net Profit, Corporate and Other Adjusted Net Profit.
Payment Services segment payment volume provides a measure of the overall size and growth of the business, and increasing our payment volumes is essential to growing our profitability.
Payment Services segment net revenue yield. We calculate Payment Services segment net revenue yield by dividing Payment Services segment net revenue by Payment Services segment payment volume. Payment Services segment net revenue yield provides a measure of our ability to generate net revenue per unit of volume we process.
Reconciliation of IFRS to Non-IFRS Operating Results
(in millions, except per share data)
| Three months ended | ||||||||||||
| RUB | RUB | USD | ||||||||||
| Revenue | 9,717 | 17,872 | 231.8 | |||||||||
| Minus: Cost of revenue (exclusive of depreciation and amortization) | 3,412 | 9,320 | 120.9 | |||||||||
| Total Net Revenue | 6,305 | 8,552 | 110.9 | |||||||||
| Segment Net Revenue | ||||||||||||
| Payment Services Segment Revenue | 8,730 | 10,803 | 140.1 | |||||||||
| PS Payment Revenue(1) | 6,948 | 8,748 | 113.5 | |||||||||
| Minus: Cost of PS Payment Revenue (exclusive of depreciation and amortization)(2) | 2,829 | 3,663 | 47.5 | |||||||||
| PS Payment Net Revenue | 4,119 | 5,085 | 66.0 | |||||||||
| PS Other Revenue(3) | 1,782 | 2,055 | 26.7 | |||||||||
| Minus: Cost of PS Other Revenue (exclusive of depreciation and amortization)(4) | 252 | 196 | 2.5 | |||||||||
| PS Other Net Revenue | 1,530 | 1,859 | 24.1 | |||||||||
| Payment Services Segment Net Revenue | 5,649 | 6,944 | 90.1 | |||||||||
| Digital Marketing Revenue | 201 | 5,922 | 76.8 | |||||||||
| Minus: Cost of CO revenue (exclusive of depreciation and amortization) | 44 | 5,181 | 67.2 | |||||||||
| Digital Marketing |
157 | 741 | 9.6 | |||||||||
| Corporate and Other Category Revenue | 785 | 1,147 | 14.9 | |||||||||
| Minus: Cost of CO revenue (exclusive of depreciation and amortization) | 286 | 280 | 3.6 | |||||||||
| Corporate and Other Category Net Revenue | 499 | 867 | 11.2 | |||||||||
| Total Segment Net Revenue | 6,305 | 8,552 | 110.9 | |||||||||
| Net profit | 2,257 | 4,499 | 58.4 | |||||||||
| Plus: | ||||||||||||
| Depreciation and amortization | 277 | 309 | 4.0 | |||||||||
| Other income and expenses, net | (21 | ) | (16 | ) | (0.2 | ) | ||||||
| Foreign exchange (gain)/loss, net | 441 | (819 | ) | (10.6 | ) | |||||||
| Gain on disposal of subsidiary | - | (424 | ) | (5.5 | ) | |||||||
| Share of gain/(loss) of an associate | - | 39 | 0.5 | |||||||||
| Interest income and expenses, net | (68 | ) | - | - | ||||||||
| Income tax expenses | 801 | 891 | 11.6 | |||||||||
| Adjusted EBITDA | 3,687 | 4,479 | 58.1 | |||||||||
| Adjusted EBITDA margin | 58.5 | % | 52.4 | % | 52.4 | % | ||||||
| Net profit | 2,257 | 4,499 | 58.4 | |||||||||
| Fair value adjustments recorded on business combinations and their amortization(5) | 83 | 125 | 1.6 | |||||||||
| Gain on disposal of subsidiary | - | (424 | ) | (5.5 | ) | |||||||
| Effect of taxation of the above items | (14 | ) | (20 | ) | (0.3 | ) | ||||||
| Adjusted Net Profit | 2,326 | 4,180 | 54.1 | |||||||||
| Adjusted Net Profit per share: | ||||||||||||
| Basic | 37.25 | 66.65 | 0.86 | |||||||||
| Diluted | 37.25 | 66.65 | 0.86 | |||||||||
| Weighted-average number of shares used in computing Adjusted Net Profit per share: | ||||||||||||
| Basic | 62,449 | 62,713 | 62,713 | |||||||||
| Diluted | 62,449 | 62,713 | 62,713 |
| (1) | PS Payment Revenue represents payment processing fees, which primarily consists of the merchant and consumer fees charged for the payment transactions. |
| (2) | Cost of PS Payment Revenue (exclusive of depreciation and amortization) primarily consists of transaction costs to acquire payments from our customers payable to agents, mobile operators, international payment systems and other parties. |
| (3) | PS Other Revenue primarily consists of revenue from fees for inactive accounts and unclaimed payments, interest revenue, cash and settlement services and related conversion income, fees for intercompany and third-party funding, and advertising fees. |
| (4) | Cost of PS Other Revenue (exclusive of depreciation and amortization) primarily consists of direct costs associated with other revenue and other costs, including but not limited to: interest expenses related to issued bonds, costs of sms notification, advertising commissions. |
| (5) | Amortization of fair value adjustments primarily includes the effect of the acquisition of control in CONTACT, Rapida and Realweb. |
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