HeadHunter Group PLC (Nasdaq: HHR, MOEX: HHRU) announced today its
financial results for the fourth quarter and the full year ended
December 31, 2020. As used below, references to “we,” “our,” “us”
or the “Company” or similar terms shall mean HeadHunter Group PLC.
Fourth Quarter 2020 Financial and
Operational Highlights
(in millions of RUB(1) and USD(2)) |
Three months ended December 31,
2020 |
|
Three months ended December 31,
2019 |
|
Change(3) |
|
Three months ended December 31,
2020 |
RUB |
|
RUB |
|
|
|
USD(4) |
Revenue |
2,450 |
|
2,066 |
|
18.5% |
|
33.2 |
Russia Segment Revenue |
2,299 |
|
1,914 |
|
20.1% |
|
31.1 |
Net Income |
650 |
|
496 |
|
30.9% |
|
8.8 |
Net Income Margin, % |
26.5% |
|
24.0% |
|
2.5 ppts |
|
|
Adjusted EBITDA(5) |
1,160 |
|
1,023 |
|
13.4% |
|
15.7 |
Adjusted EBITDA Margin, %(5) |
47.4% |
|
49.5% |
|
(2.2) ppts |
|
|
Adjusted Net Income(5) |
852 |
|
713 |
|
19.5% |
|
11.5 |
Adjusted Net Income Margin, %(5) |
34.8% |
|
34.5% |
|
0.3 ppts |
|
|
(1) “RUB” or “₽” denote Russian
Ruble throughout this release.(2) “USD” or “$”
denote U.S. Dollar throughout this
release.(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
throughout this release are included solely for the convenience of
the reader and were calculated at the exchange rate quoted by the
Central Bank of Russia as of December 31, 2020 (RUB 73.8757 to USD
1). (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 18.5% due to the increase in revenue across all
customer segments in Russia reflecting a return to growth following
a slowdown caused by COVID-19.
- Net income is up
30.9% to ₽650 million.
- Adjusted EBITDA
is up 13.4% to ₽1,160 million; Adjusted EBITDA Margin is down to
47.4% from 49.5%, or by 2.2 ppts., mostly due to a discretionary
bonus payment to our personnel in the fourth quarter 2020.
- Adjusted Net
Income is up 19.5% to ₽852 million.
(in millions of RUB and USD) |
As of December 31, 2020 |
|
As of December 31, 2019 |
|
Change |
|
As of December 31, 2020 |
RUB |
|
RUB |
|
|
|
USD |
Net Working Capital(1) |
(3,849) |
|
(2,994) |
|
28.5% |
|
(52.1) |
Net Debt(1) |
4,909 |
|
3,040 |
|
61.5% |
|
66.4 |
Net Debt to Adjusted EBITDA Ratio(1) |
1.2x |
|
0.8x |
|
|
|
|
(1) Net Working Capital, Net
Debt, and Net Debt to Adjusted EBITDA Ratio are non-IFRS financial
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.
- Net Working
Capital as of December 31, 2020 decreased by ₽855 million, or
28.5%, primarily due to (i) an increase in contract liabilities of
₽418 million from customer prepayments, and (ii) an increase in
trade and other payables (current portion) due to ₽234 million
consideration payable for the acquisition of Zarplata.ru;
- Net Debt
increased by ₽1,869 million, or 61.5%, primarily due to ₽3,100
million paid for the acquisition of Zarplata.ru and ₽1,885 million
dividend payment, offset by ₽3,215 million cash generated from
operating activities (see “Cash Flows”);
- As a result of
the increase in Net Debt, Net Debt to Adjusted EBITDA Ratio
increased from 0.8x to 1.2x.
Full-Year 2020 Financial and Operational
Highlights
(in millions of RUB and USD) |
Twelve months ended December 31,
2020 |
|
Twelve months ended December 31,
2019 |
|
Change |
|
Twelve months ended December 31,
2020 |
RUB |
|
RUB |
|
|
|
USD |
Revenue |
8,282 |
|
7,789 |
|
6.3% |
|
112.1 |
Russia Segment Revenue |
7,724 |
|
7,212 |
|
7.1% |
|
104.6 |
Net Income |
1,886 |
|
1,581 |
|
19.3% |
|
25.5 |
Net Income Margin, % |
22.8% |
|
20.3% |
|
2.5 ppts |
|
|
Adjusted EBITDA(1) |
4,187 |
|
3,931 |
|
6.5% |
|
56.7 |
Adjusted EBITDA Margin, %(1) |
50.6% |
|
50.5% |
|
0.1 ppts |
|
|
Adjusted Net Income(1) |
2,733 |
|
2,409 |
|
13.4% |
|
37.0 |
Adjusted Net Income Margin, %(1) |
33.0% |
|
30.9% |
|
2.1 ppts |
|
|
(1) 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 6.3%
due to the increase in revenue across all customer segments in
Russia, except Small and Medium Accounts in Moscow, which were
affected most by the COVID-19 pandemic and related government
measures to curb its spread.
- Our Russia Segment
is up 7.1%, and the year-on-year growth/(decline) in revenues in
this segment versus the same quarters in 2019 was 18.2%, (19.1)%,
9.1%, and 20.1% in the first, second, third, and fourth quarter of
2020, respectively, reflecting significant impact of the COVID-19
pandemic in the second quarter 2020, followed by a gradual return
to growth during the third and fourth quarters.
- Net Income is up
19.3% to ₽1,886 million.
- Adjusted EBITDA
is up 6.5%; Adjusted EBITDA Margin is 50.6%, flat compared to 50.5%
in the year 2019, as the increase in personnel expenses (excluding
equity-settled share-based compensations and other items) as a
percentage of revenue was offset by the foreign exchange gain.
- Adjusted Net
Income is up 13.4% to ₽2,733 million.
CEO quote
“Even though 2020 was unprecedentedly turbulent
year, it has also brought about a radical behavioral transformation
into the entire economy, which, in our view, will have a
long-lasting positive effect on digital recruitment market,” said
Mikhail Zhukov, Chief Executive Officer of HeadHunter Group PLC.
“Having recovered from the pandemic hit, in Q4 we managed to put
the business back on growth track across all major products and
segments, capitalizing on our leading market positions and solid
industry fundamentals.
“Despite being fairly busy dealing with COVID-19
repercussions throughout the year, we still delivered on key
pillars of our growth strategy: sustained overall customer base
expansion, significantly enhanced monetization switching to new
subscription model and further consolidated regional market by
acquisition of Zarplata.ru.
“Looking forward, we expect that further
recovery of the Russian economy will reinforce our leadership and
accelerate execution on our long-term strategy.”
Impact of the COVID-19 Pandemic on Our
Operations and Financial Position
In March 2020, the World Health Organization
declared the spread of COVID-19 virus a global pandemic.
Measures taken by the Russian government to curb
spread of the disease, such as a lock-down in Moscow and a
nation-wide “period of non-working days,” led to a decrease in the
number of job postings and the number of new CV database
subscriptions in the second quarter of 2020. As a response to the
decrease in revenue, we implemented temporary cost-cutting
initiatives, including putting all non-essential hiring, capital
expenditure and other expenses on hold. Following easing of
restrictions in May 2020, we saw a gradual recovery of our key
performance indicators (“KPIs”) in the third quarter of 2020.
Although there was a spike in the number of new cases in the fourth
quarter of 2020 that was comparable to that of the second quarter
of 2020, less severe restrictions were in place in Russia, and we
did not experience similar decrease in our KPIs in the fourth
quarter 2020.
We have not seen a specific impact of COVID-19
on our financial position as of December 31, 2020. Recent
developments in the first quarter of 2021, as of the date of this
release, also do not indicate a specific impact of COVID-19 on our
financial position.
Our liquidity analysis, based on our recent
performance and current estimates, shows that we have adequate
resources to finance our operations for the foreseeable future.
Our financial position, results and liquidity
may be affected in the future by any further adverse developments
related to COVID-19.
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 Russia, individually
comprises less than 10% of our revenue, for reporting purposes we
combine all segments other than Russia into the “Other segments”
category.
On December 25, 2020, we completed the
acquisition of 100% of the issued charter capital in LLC
“Zarplata.ru”, a job classified platform with a strong footprint in
certain Russian regions, such as Siberia and the Ural. As of
December 31, 2020, operations of Zarplata.ru met the criteria of a
reportable operating segment. However, as the financial results of
Zarplata.ru for the period from the acquisition date to December
31, 2020 were non-material, they are not included in the statement
of income and comprehensive income for the year ended December 31,
2020.
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
Russia, we divide our customers into (i) Key Accounts and (ii)
Small and Medium Accounts, based on their annual revenue and
employee headcount. We define “Key Accounts” as customers who,
according to the Spark-Interfax database, have an annual revenue of
₽2 billion or more or a headcount of 250 or more employees and have
not marked themselves as recruiting agencies on their page on our
website. We define “Small and Medium Accounts” as customers who,
according to the Spark-Interfax database, have both an annual
revenue of less than ₽2 billion and a headcount of less than 250
employees and have not marked themselves as recruiting agencies on
their page on our website. Our website allows several legal
entities and/or natural persons to be registered, each with a
unique identification number, under a single account page (e.g., a
group of companies). Each legal entity registered under a single
account is defined as a separate customer and is included in the
number of paying customers metric. Natural persons registered under
a single account are assumed to be employees of the legal entities
of that account and, thus, are not considered separate customers
and so are not included in the number of paying customers metric.
However, in a specific reporting period, if only natural persons
used our services under such account, they are collectively
included in the number of paying customers as one customer.
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 Russia predominantly fall
during the first quarter of each year, which results in lower
business activity in that quarter. Accordingly, our first quarter
revenue is typically slightly lower than in the other quarters. For
example, our first quarter revenue in our Russia segment in 2019
was 21.6%.
The number of business days in a quarter may
also be affected by calendar layout in a specific year. In
addition, the Government of Russia decides on an annual basis how
public holidays that occur on weekends will be reallocated to
business days throughout the year as a requirement of the Labor
Code of Russia. As a result, the number of business days in a
quarter may be different in each year (while the total number of
business days in a year usually remains the same). Therefore, the
comparability of our quarterly results, including with respect to
our revenue growth rate, may be affected by this variance. In
addition, when a calendar layout in a specific year provides for
several consecutive holidays or a small number of business days
between holidays or holidays adjacent to weekends, HR managers of
our customers may take short vacations, further contributing to the
decrease in business activities in these periods.
The following table illustrates the number of
business days by quarter for the years 2018 to 2020. In 2020 there
was one business day more in the second quarter and in the total
year and the same number of business days in the first, third and
fourth quarters, meaning that the calendar layout in 2020 is
substantially the same as in 2019, allowing for good comparability
of our quarterly results:
|
Number of business days |
|
As % of total business days per year |
|
2020 |
|
2019 |
|
2018 |
|
2020 |
|
2019 |
|
2018 |
First quarter |
57 |
|
57 |
|
56 |
|
23.0 |
% |
|
23.1 |
% |
|
22.7 |
% |
Second quarter |
60 |
|
59 |
|
61 |
|
24.2 |
% |
|
23.9 |
% |
|
24.7 |
% |
Third quarter |
66 |
|
66 |
|
65 |
|
26.6 |
% |
|
26.7 |
% |
|
26.3 |
% |
Fourth quarter |
65 |
|
65 |
|
65 |
|
26.2 |
% |
|
26.3 |
% |
|
26.3 |
% |
Year |
248 |
|
247 |
|
247 |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
On March 25, 2020, in response to the COVID-19
pandemic, the period from March 30, 2020 to May 11, 2020 was
announced a ‘period of non-working days’ in Russia. As a result,
two and 22 working days formally became non-working in the first
and second quarter of 2020, respectively. However, at least some
level of business activity was retained during this period, as
remote work was encouraged and some sectors such as banking were
functioning with limited capacity.
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 December 31, 2020 and December 31, 2019, respectively. Most
of our marketing and personnel expenses are fixed and not directly
tied to our revenue.
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 fourth quarter segment
external expenses in our Russia segment in 2019 were 27.1%, of
total Russia 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. 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, 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 March 31, June 30, September 30, and
December 31, 2020 were ₽2,584 million, ₽2,355 million, ₽2,323
million, and ₽2,785 million, respectively.
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 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 have usually been highest in the fourth
quarter, our Net Working Capital has usually been lowest in the
fourth quarter. For example, our Net Working Capital of March 31,
June 30, September 30, and December 31, 2020 was ₽ (3,130) million,
₽ (2,865) million, ₽ (3,111) million, and ₽(3,849) million,
respectively.
Fourth Quarter 2020 Results
Our revenue was ₽2,450 million for the three
months ended December 31, 2020 compared to ₽2,066 million for the
three months ended December 31, 2019. Revenue for the three months
ended December 31, 2020 increased by ₽383 million, or 18.5%,
compared to the three months ended December 31, 2019, primarily due
to an increase in our Russia segment.
In our Russia segment, Key Accounts revenue
increased by 21.8% in the three months ended December 31, 2020.
This was mainly on the back of the increase in average revenue per
customer (“ARPC”) by 18.2% in Moscow and St. Petersburg, explained
by the list price increase in the beginning of 2020 and a reduction
in discounts, whilst the average number of units per customer
remained relatively flat. We also increased the number of customers
in our Key Accounts segment by 7.7% in the three months ended
December 31, 2020, mostly in Other regions of Russia.
Small and Medium Accounts revenue increased by
20.2% in the three months ended December 31, 2020, due to an
increase in the number of paying customers on the back of recovery
of business activity after COVID 19. ARPC in this segment remained
relatively flat, as the increase in average price per unit from
list price increase was offset by the decrease in the average
number of units per customer.
Our revenue in Other segments remained
relatively flat on the back of political unrest in Belarus.
The following table breaks down revenue by
product for the periods indicated:
|
For the three months ended December
31, |
|
For the year ended December
31, |
(in thousands of RUB) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Bundled Subscriptions |
653,755 |
|
581,484 |
|
12.4 |
% |
|
2,372,467 |
|
2,223,951 |
|
6.7 |
% |
CV Database Access |
490,445 |
|
448,931 |
|
9.2 |
% |
|
1,812,245 |
|
1,761,729 |
|
2.9 |
% |
Job Postings |
1,082,075 |
|
821,930 |
|
31.7 |
% |
|
3,342,225 |
|
3,112,188 |
|
7.4 |
% |
Other value-added services |
223,387 |
|
214,013 |
|
4.4 |
% |
|
755,170 |
|
690,873 |
|
9.3 |
% |
Total revenue |
2,449,662 |
|
2,066,358 |
|
18.5 |
% |
|
8,282,107 |
|
7,788,741 |
|
6.3 |
% |
The following table sets forth the revenue
broken down by type of customer and region for the periods
indicated:
|
For the three months ended December
31, |
|
For the year endedDecember
31, |
(in thousands of RUB) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Key Accounts in Russia |
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
663,028 |
|
537,981 |
|
23.2 |
% |
|
2,156,248 |
|
1,981,959 |
|
8.8 |
% |
Other regions of Russia |
236,847 |
|
200,631 |
|
18.1 |
% |
|
815,323 |
|
664,649 |
|
22.7 |
% |
Sub-total |
899,876 |
|
738,612 |
|
21.8 |
% |
|
2,971,571 |
|
2,646,608 |
|
12.3 |
% |
Small and Medium Accounts in Russia |
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
746,836 |
|
649,335 |
|
15.0 |
% |
|
2,526,381 |
|
2,579,517 |
|
(2.1 |
)% |
Other regions of Russia |
536,932 |
|
418,479 |
|
28.3 |
% |
|
1,825,497 |
|
1,614,359 |
|
13.1 |
% |
Sub-total |
1,283,768 |
|
1,067,814 |
|
20.2 |
% |
|
4,351,878 |
|
4,193,876 |
|
3.8 |
% |
Foreign customers of Russia segment |
15,809 |
|
5,259 |
|
200.6 |
% |
|
57,822 |
|
41,385 |
|
39.7 |
% |
Other customers in Russia |
99,840 |
|
102,358 |
|
(2.5 |
)% |
|
342,993 |
|
329,893 |
|
4.0 |
% |
Total for “Russia” operating segment |
2,299,293 |
|
1,914,043 |
|
20.1 |
% |
|
7,724,264 |
|
7,211,762 |
|
7.1 |
% |
Other segments |
150,370 |
|
152,315 |
|
(1.3 |
)% |
|
557,843 |
|
576,979 |
|
(3.3 |
)% |
Total revenue |
2,449,662 |
|
2,066,358 |
|
18.5 |
% |
|
8,282,107 |
|
7,788,741 |
|
6.3 |
% |
The following table sets forth the number of
paying customers and ARPC for the periods indicated:
|
For the three months ended December
31, |
|
For the year ended December
31, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Number of paying customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
4,697 |
|
4,506 |
|
4.2 |
% |
|
5,514 |
|
5,368 |
|
2.7 |
% |
Other regions of Russia |
5,167 |
|
4,657 |
|
11.0 |
% |
|
6,287 |
|
5,757 |
|
9.2 |
% |
Key Accounts, total |
9,864 |
|
9,163 |
|
7.7 |
% |
|
11,801 |
|
11,125 |
|
6.1 |
% |
Small and Medium Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
69,309 |
|
61,275 |
|
13.1 |
% |
|
129,599 |
|
123,295 |
|
5.1 |
% |
Other regions of Russia |
94,138 |
|
75,491 |
|
24.7 |
% |
|
185,246 |
|
162,005 |
|
14.3 |
% |
Small and Medium Accounts, total |
163,447 |
|
136,766 |
|
19.5 |
% |
|
314,845 |
|
285,300 |
|
10.4 |
% |
Foreign customers of Russia segment |
749 |
|
533 |
|
40.5 |
% |
|
1,579 |
|
1,253 |
|
26.0 |
% |
Total for “Russia” operating segment |
174,060 |
|
146,462 |
|
18.8 |
% |
|
328,225 |
|
297,678 |
|
10.3 |
% |
Other segments, total |
11,641 |
|
12,846 |
|
(9.4 |
)% |
|
22,334 |
|
24,715 |
|
(9.6 |
)% |
Total number of paying customers |
185,701 |
|
159,308 |
|
16.6 |
% |
|
350,559 |
|
322,393 |
|
8.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPC (in RUB) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
141,160 |
|
119,392 |
|
18.2 |
% |
|
391,050 |
|
369,217 |
|
5.9 |
% |
Other regions of Russia |
45,838 |
|
43,082 |
|
6.4 |
% |
|
129,684 |
|
115,451 |
|
12.3 |
% |
Key Accounts, total |
91,228 |
|
80,608 |
|
13.2 |
% |
|
251,807 |
|
237,897 |
|
5.8 |
% |
Small and Medium Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
10,775 |
|
10,597 |
|
1.7 |
% |
|
19,494 |
|
20,922 |
|
(6.8 |
)% |
Other regions of Russia |
5,704 |
|
5,543 |
|
2.9 |
% |
|
9,854 |
|
9,965 |
|
(1.1 |
)% |
Small and Medium Accounts,
total |
7,854 |
|
7,808 |
|
0.6 |
% |
|
13,822 |
|
14,700 |
|
(6.0 |
)% |
Other segments, total |
12,917 |
|
11,857 |
|
8.9 |
% |
|
24,977 |
|
23,345 |
|
7.0 |
% |
Operating Costs and Expenses (exclusive
of depreciation and amortization)
Operating costs and expenses (exclusive of
depreciation and amortization) were ₽1,419 million for the three
months ended December 31, 2020 compared to ₽1,143 million for the
three months ended December 31, 2019, representing an increase by
₽276 million, or 24.1%.
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 endedDecember
31, |
|
For the year endedDecember
31, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Personnel expenses |
(808,344 |
) |
|
(605,016 |
) |
|
33.6 |
% |
|
(2,579,958 |
) |
|
(2,234,309 |
) |
|
15.5 |
% |
Marketing expenses |
(318,219 |
) |
|
(274,274 |
) |
|
16.0 |
% |
|
(1,105,247 |
) |
|
(1,046,678 |
) |
|
5.6 |
% |
Other general and administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subcontractors and other expenses related to provision of
services |
(63,942 |
) |
|
(59,483 |
) |
|
7.5 |
% |
|
(194,644 |
) |
|
(186,337 |
) |
|
4.5 |
% |
Office rent and maintenance |
(54,289 |
) |
|
(58,149 |
) |
|
(6.6 |
)% |
|
(176,672 |
) |
|
(206,501 |
) |
|
(14.4 |
)% |
Professional services |
(90,653 |
) |
|
(52,371 |
) |
|
73.1 |
% |
|
(335,681 |
) |
|
(347,963 |
) |
|
(3.5 |
)% |
Insurance expense |
(47,649 |
) |
|
(42,454 |
) |
|
12.2 |
% |
|
(181,047 |
) |
|
(111,251 |
) |
|
62.7 |
% |
Hosting and other web-site maintenance |
(11,783 |
) |
|
(11,718 |
) |
|
0.6 |
% |
|
(46,325 |
) |
|
(40,421 |
) |
|
14.6 |
% |
Other operating expenses |
(23,919 |
) |
|
(39,655 |
) |
|
(39.7 |
)% |
|
(71,726 |
) |
|
(126,803 |
) |
|
(43.4 |
)% |
Total other general and administrative expenses |
(292,235 |
) |
|
(263,830 |
) |
|
10.8 |
% |
|
(1,006,095 |
) |
|
(1,019,276 |
) |
|
(1.3 |
)% |
Operating costs and expenses (exclusive of depreciation and
amortization) |
(1,418,798 |
) |
|
(1,143,120 |
) |
|
24.1 |
% |
|
(4,691,300 |
) |
|
(4,300,263 |
) |
|
9.1 |
% |
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 December
31, |
|
For the year ended December
31, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Personnel expenses |
33.0 |
% |
|
29.3 |
% |
|
3.7 |
% |
|
31.2 |
% |
|
28.7 |
% |
|
2.5 |
% |
Marketing expenses |
13.0 |
% |
|
13.3 |
% |
|
(0.3 |
)% |
|
13.3 |
% |
|
13.4 |
% |
|
(0.1 |
)% |
Other general and administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subcontractors and other expenses related to provision of
services |
2.6 |
% |
|
2.9 |
% |
|
(0.3 |
)% |
|
2.4 |
% |
|
2.4 |
% |
|
0.0 |
% |
Office rent and maintenance |
2.2 |
% |
|
2.8 |
% |
|
(0.6 |
)% |
|
2.1 |
% |
|
2.7 |
% |
|
(0.5 |
)% |
Professional services |
3.7 |
% |
|
2.5 |
% |
|
1.2 |
% |
|
4.1 |
% |
|
4.5 |
% |
|
(0.4 |
)% |
Insurance expense |
1.9 |
% |
|
2.1 |
% |
|
(0.1 |
)% |
|
2.2 |
% |
|
1.4 |
% |
|
0.8 |
% |
Hosting and other web-site maintenance |
0.5 |
% |
|
0.6 |
% |
|
(0.1 |
)% |
|
0.6 |
% |
|
0.5 |
% |
|
0.0 |
% |
Other operating expenses |
1.0 |
% |
|
1.9 |
% |
|
(0.9 |
)% |
|
0.9 |
% |
|
1.6 |
% |
|
(0.8 |
)% |
Total other general and administrative expenses |
11.9 |
% |
|
12.8 |
% |
|
(0.8 |
)% |
|
12.1 |
% |
|
13.1 |
% |
|
(0.9 |
)% |
Operating costs and expenses (exclusive of depreciation and
amortization) as a percentage of revenue |
57.9 |
% |
|
55.3 |
% |
|
2.6 |
% |
|
56.6 |
% |
|
55.2 |
% |
|
1.4 |
% |
Personnel expenses
Personnel expenses for the three months ended
December 31, 2020 increased by ₽203 million, or 33.6%, compared to
the three months ended December 31, 2019 primarily due to: (i) an
increase in salaries due to indexation of wages effective from the
beginning of 2020, (ii) an increase in headcount from 772 as of
December 31, 2019 to 832 as of December 31, 2020 mainly in the
development and sales teams, and (iii) a discretionary bonus that
we paid to our personnel in the fourth quarter 2020 to compensate
for reduction in bonuses earlier in the year as part of our
cost-cutting initiatives in response to the COVID-19 pandemic.
Personnel expenses increased as a percentage of
revenue from 29.3% in the fourth quarter 2019 to 33.0% in the
fourth quarter of 2020.
Personnel expenses (excluding share-based
compensations and other items) were 29.2% of our revenue in the
fourth quarter of 2020, a 2.9 ppts increase compared to 26.3% in
the fourth quarter of 2019. This increase was mostly due to the
temporary effect of the discretionary bonus we paid to our
personnel, as explained above.
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.
Marketing expenses
Marketing expenses for the three months ended
December 31, 2020 increased by ₽44 million, or 16%, compared to the
three months ended December 31, 2019 primarily due to an increase
in online marketing expenses.
Marketing expenses as percentage of revenue were
13.0% in the fourth quarter 2020, relatively flat compared to 13.3%
in the fourth quarter of 2019.
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 December 31,
2020 increased by ₽28 million, or 10.8%, compared to the three
months ended December 31, 2019, mainly due to professional costs
related to the acquisition of Zarplata.ru in the fourth quarter of
2020 not occurring in the fourth quarter of 2019. This was partly
offset by a decrease in business travelling expenses on the back of
the COVID-19 pandemic.
Our other general and administrative expenses as
a percentage of revenue decreased to 11.9% in the fourth quarter
2020 from 12.8% in the fourth quarter 2019.
Our other general and administrative expenses
(excluding items unrelated to our core business activity) were
10.4% of our revenue in the fourth quarter 2020, relatively flat
compared to 10.0% in the fourth quarter 2019.
See “Use of Non-IFRS Financial Measures”
elsewhere in this release for a reconciliation of other general and
administrative expenses (excluding items unrelated to our core
business activity) to the nearest IFRS measure.
Net foreign exchange loss
Net foreign exchange loss was ₽1 million for the
three months ended December 31, 2020 compared to ₽22 million for
the three months ended December 31, 2019.
Depreciation and
amortization
Depreciation and amortization were ₽195 million
for the three months ended December 31, 2020, an increase of 9.7%
compared to ₽178 million for the three months ended December 31,
2019. The increase mainly relates to capital expenditures incurred
in the renovation of our offices in Moscow and Yaroslavl that were
completed in the second quarter of 2020.
Finance income and costs
Finance income was ₽25 million for the three
months ended December 31, 2020 compared to ₽19 million for the
three months ended December 31, 2019.
Finance costs were ₽98 million for the three
months ended December 31, 2020 compared to ₽133 million for the
three months ended December 31, 2019. Finance costs for the three
months ended December 31, 2020 decreased by ₽35 million, or 26.5%,
compared to the three months ended December 31, 2019 primarily due
to a gradual decrease in the Key Rate of the Central Bank of Russia
over the last 12 months from 6.25% as of December 31, 2019 to 4.25%
as of December 31, 2020, that resulted in a decrease in the
interest charge accrued on our bank loan.
Income tax expense
Income tax expense for the three months ended
December 31, 2020 increased by ₽14 million, or 13.6%, compared to
the three months ended December 31, 2019 primarily due to an
increase in the taxable profit.
The effective tax rate has decreased to 15.1%
for the three months ended December 31, 2020 from 17.0% for the
three months ended December 31, 2019.
Income tax expense in the fourth quarter 2020
and the fourth quarter 2019 was affected by reversal of provision
for uncertain tax positions of ₽88 million in the fourth quarter of
2019 and ₽92 million in the fourth quarter of 2020, resulting in
the effective tax rates not indicative of the full-year effective
tax rates.
The effective tax rate for the year ended
December 31, 2020 decreased to 26.7%, compared to 29.0% for the
year ended December 31, 2019.
Net income, Adjusted EBITDA and Adjusted
Net Income
In the three months ended December 31, 2020
compared to the three months ended December 31, 2019, our net
income has increased by 30.9% to ₽650 million, our Adjusted EBITDA
has increased by 13.4% to ₽1,160 million, and our Adjusted Net
Income has increased by 19.5% to ₽852 million, primarily due to the
reasons described above.
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 December
31, |
|
2020 |
|
2019 |
|
Change |
Net cash generated from operating activities |
3,214,573 |
|
|
2,611,054 |
|
|
603,519 |
|
Net cash used in investing activities |
(3,227,607 |
) |
|
(637,117 |
) |
|
(2,590,490 |
) |
Net cash generated from/(used in) financing activities |
1,114,050 |
|
|
(2,653,440 |
) |
|
3,767,490 |
|
Net increase/(decrease) in cash and cash
equivalents |
1,101,016 |
|
|
(679,503 |
) |
|
1,780,519 |
|
Cash and cash equivalents, beginning of period |
2,089,215 |
|
|
2,861,110 |
|
|
(771,895 |
) |
Effect of exchange rate changes on cash |
177,379 |
|
|
(92,392 |
) |
|
269,771 |
|
Cash and cash equivalents, end of period |
3,367,610 |
|
|
2,089,215 |
|
|
1,278,395 |
|
Net cash generated from operating activities
For the twelve months ended December 31, 2020,
net cash generated from operating activities was ₽3,215 million,
compared to ₽2,611 million for the twelve months ended December 31,
2019. The change between the periods of ₽604 million was primarily
driven by: (i) a decrease in interest paid due to decreases in the
Key Rate of Central Bank of Russia, (ii) an increase in net income
adjusted for non-cash items and items not affecting cash flow from
operating activities and (iii) a decrease in income tax paid due to
a decrease in income tax expense. This was offset by change in
other liabilities due to advances issued from depositary related to
the IPO.
Net cash used in investing activities
For the twelve months ended December 31, 2020,
net cash used in investing activities was ₽3,228 million compared
to ₽637 million for the twelve months ended December 31, 2019. The
change between the periods of ₽2,590 million was mainly due to the
acquisition of 100% of the share capital of Zarplata.ru for ₽3,505
million, of which ₽3,100 million was paid in 2020 and ₽405 million
remains payable as of December 31, 2020. This was partly offset by:
(i) an acquisition of a 25.01% ownership interest in Skilaz LLC for
₽235 million in the year 2019 not occurring in the year 2020, and
(ii) a decrease in the acquisition of fixed assets as we completed
renovations in our Moscow and Yaroslavl offices in the second
quarter of 2020.
Net cash generated from (used in) financing
activities
For the year ended December 31, 2020, net cash
generated from financing activities was ₽1,114 million, compared to
₽2,653 million used in the year ended December 31, 2019. The change
between the periods of ₽3,767 million was primarily due to (i) the
issue of ₽4,000 million interest-bearing non-convertible bonds in
the fourth quarter of 2020 and (ii) the decrease in bank and other
loans repaid (net of bank and other loans received) due to
restructuring of a bank loan, which was partly offset by an
increase of the dividends paid to shareholders by
₽752 million.
Capital Expenditures
Our additions to property and equipment and
intangible assets for the twelve months ended December
31, 2020 were ₽4,332 million compared to ₽492 million for the
twelve months ended December 31, 2019, an increase of ₽3,840
million was primarily due to acquisition of property and equipment
and intangible assets, including goodwill relating to the purchase
of Zarplata.ru in the amount of ₽4,071 million, that was partly
offset by a decrease of ₽231 million primarily due to office
renovation costs mostly incurred during 2019.
Dividend
Our Board of Directors plans to discuss a
potential 2020 dividend in the second quarter of 2021, based on
recent developments in revenue, COVID-19 impact in Russia, growth
opportunities and other factors.
Financial Outlook
The following forward-looking statement reflects
our expectations as of March 18, 2021:
We currently expect our revenue to grow in the
range of 37% to 42% in the year 2021 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.
Fourth Quarter and Full-Year 2020
Financial Results Conference Call
HeadHunter will host a conference call and
webcast to discuss its results at 9:00 a.m. U.S. Eastern Time (4:00
p.m. Moscow time, 1:00 p.m. London time) the same day.
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:
Standard International: |
+44 (0) 2071 928338 |
UK (local): |
+44 (0) 8444 819752 |
UK (toll free): |
0800 279 6619 |
USA (local): |
+1 646 741 3167 |
USA (toll free): |
+1 877 870 9135 |
Russian Federation (local): |
+7 495 249 9851 |
Russian Federation (toll free): |
810 800 2114 4011 |
Conference ID: |
2242365 |
Webcast:
https://edge.media-server.com/mmc/p/w3yf6uws
Contacts:
Investor InquiriesRoman SafiyulinE-mail:
r.safiyulin@hh.ru
Media InquiriesAlexander DzhabarovE-mail:
a.dzhabarov@hh.ru
About HeadHunter Group PLC
HeadHunter is the leading online recruitment
platform in Russia and the Commonwealth of Independent States
focused on providing comprehensive talent acquisition services,
such as access to extensive CV database, job postings (jobs
classifieds platform) and a portfolio of value-added services.
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
International Accounting Standards Board (“IASB”), we present the
following non-IFRS1 financial measures: Adjusted EBITDA, Adjusted
Net Income, Adjusted EBITDA Margin and Adjusted Net Income Margin.
The presentation of these financial measures is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
IFRS. For more information on these non-IFRS financial measures,
please see the tables captioned “Reconciliations of non-IFRS
financial measures to the nearest comparable IFRS measures”,
included following the accompanying financial tables. We define the
various non-IFRS financial measures we use as follows:
- “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 and other income/(loss) not related to underlying
business activity; (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; (13) secondary public offering (“SPO”)
related costs.
- “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 and other income/(loss) not related to
underlying business activity; (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 of HeadHunter FSU Limited from Mail.Ru
Group Limited (the “Acquisition”); (11) the tax effect of the
adjustment described in (10); (12) (gain)/ loss related to the
remeasurement and expiration of a tax indemnification asset; (13)
net (gain)/loss on financial assets measured at fair value through
profit and loss; (14) secondary public offering (“SPO”) related
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 International Accounting Standards Board
(“IASB”).
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.
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 Working Capital
Net Working Capital is a financial measure not
defined under IFRS. We define Net Working Capital as our trade and
other receivables plus prepaid expenses and other current assets,
less our contract liabilities and trade and other payables, in all
cases, a current portion of a specific asset or liability. We
believe that Net Working Capital is a useful metric to assess our
ability to service debt, fund new investment opportunities,
distribute dividends to our shareholders and assess our working
capital requirements. 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 Working Capital.
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 December 31, 2021,
future discussions regarding a 2020 dividend, the anticipated
impact of the COVID-19 pandemic on our business and results of
operations, the sufficiency of our resources and our ability to
finance our operations for the foreseeable future, as well as
statements that include the words “expect,” “intend,” “plan,”
“believe,” “project,” “forecast,” “estimate,” “may,” “should,”
“anticipate” and similar statements of a future or forward-looking
nature. These forward-looking statements are based on management’s
current expectations. Actual results may differ materially from the
results predicted or implied by such statements, and our reported
results should not be considered as an indication of future
performance. The potential risks and uncertainties that could cause
actual results to differ from the results predicted or implied by
such statements include, among others, significant competition in
our markets, our ability to maintain and enhance our brand, our
ability to improve our user experience and product offerings, our
ability to respond to industry developments, our reliance on
Russian Internet infrastructure, macroeconomic and global
geopolitical developments affecting the Russian economy or our
business, including the impact of the COVID-19 pandemic, changes in
the political, legal and/or regulatory environment, privacy and
data protection concerns and our need to expend capital to
accommodate the growth of the business, as well as those risks and
uncertainties included under the caption “Risk Factors” in our
Annual Report on Form 20-F for the year ended December 31, 2019 and
our prospectus pursuant to Rule 424(b) filed with the SEC on July
16, 2020, as such factors may be updated from time to time in our
other filings with the U.S. Securities and Exchange Commission
(“SEC”), each of which is on file with the SEC and is available on
the SEC website at www.sec.gov. In addition, we operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements that we may make. In light of these
risks, uncertainties and assumptions, the forward-looking events
and circumstances discussed in this release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. In
addition, the forward-looking statements made in this release
relate only to events or information as of the date on which the
statements are made in this release. Except as required by law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
Unaudited Consolidated Statement of
Income and Comprehensive Income
(in thousands of RUB and USD, except per share
amounts)
|
For the three months ended December
31, |
|
For the year ended December
31, |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
RUB |
|
|
RUB |
|
|
USD |
|
|
RUB |
|
|
RUB |
|
|
USD |
|
Revenue |
2,449,662 |
|
|
2,066,358 |
|
|
33,159 |
|
|
8,282,107 |
|
|
7,788,741 |
|
|
112,109 |
|
Operating costs and expenses (exclusive of depreciation and
amortization) |
(1,418,798 |
) |
|
(1,143,120 |
) |
|
(19,205 |
) |
|
(4,691,300 |
) |
|
(4,300,263 |
) |
|
(63,503 |
) |
Depreciation and amortization |
(195,061 |
) |
|
(177,786 |
) |
|
(2,640 |
) |
|
(750,558 |
) |
|
(683,317 |
) |
|
(10,160 |
) |
Operating income |
835,803 |
|
|
745,452 |
|
|
11,314 |
|
|
2,840,249 |
|
|
2,805,161 |
|
|
38,446 |
|
Finance income |
25,316 |
|
|
19,041 |
|
|
343 |
|
|
59,329 |
|
|
76,764 |
|
|
803 |
|
Finance costs |
(97,902 |
) |
|
(133,120 |
) |
|
(1,325 |
) |
|
(409,545 |
) |
|
(603,280 |
) |
|
(5,544 |
) |
Net foreign exchange gain/(loss) |
(1,443 |
) |
|
(21,778 |
) |
|
(20 |
) |
|
83,030 |
|
|
(46,508 |
) |
|
1,124 |
|
Share of loss of equity-accounted investees (net of income
tax) |
(10,404 |
) |
|
(21,958 |
) |
|
(141 |
) |
|
(49,181 |
) |
|
(30,542 |
) |
|
(666 |
) |
Other income |
13,761 |
|
|
10,309 |
|
|
186 |
|
|
47,715 |
|
|
23,853 |
|
|
646 |
|
Profit before income tax |
765,131 |
|
|
597,946 |
|
|
10,357 |
|
|
2,571,597 |
|
|
2,225,448 |
|
|
34,810 |
|
Income tax expense |
(115,326 |
) |
|
(101,504 |
) |
|
(1,561 |
) |
|
(685,772 |
) |
|
(644,422 |
) |
|
(9,283 |
) |
Net income for the period |
649,805 |
|
|
496,442 |
|
|
8,796 |
|
|
1,885,825 |
|
|
1,581,026 |
|
|
25,527 |
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company |
621,015 |
|
|
465,926 |
|
|
8,406 |
|
|
1,748,960 |
|
|
1,448,018 |
|
|
23,674 |
|
Non-controlling interest |
28,790 |
|
|
30,516 |
|
|
390 |
|
|
136,865 |
|
|
133,008 |
|
|
1,853 |
|
Comprehensive income/(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that are or may be reclassified subsequently to profit or
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences |
(26,915 |
) |
|
(16,227 |
) |
|
(364 |
) |
|
15,109 |
|
|
(41,818 |
) |
|
205 |
|
Total comprehensive income. net of tax |
622,890 |
|
|
480,215 |
|
|
8,432 |
|
|
1,900,934 |
|
|
1,539,208 |
|
|
25,732 |
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company |
597,291 |
|
|
450,442 |
|
|
8,085 |
|
|
1,762,011 |
|
|
1,408,597 |
|
|
23,851 |
|
Non-controlling interest |
25,599 |
|
|
29,773 |
|
|
347 |
|
|
138,923 |
|
|
130,611 |
|
|
1,880 |
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (in Russian Roubles per share) |
12.3 |
|
|
9.3 |
|
|
0.17 |
|
|
34.8 |
|
|
29.0 |
|
|
0.47 |
|
Diluted (in Russian Roubles per share) |
12.0 |
|
|
9.0 |
|
|
0.16 |
|
|
33.9 |
|
|
28.4 |
|
|
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Statement of
Financial Position
As at
(in thousands of RUB and USD) |
December 31, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
RUB |
|
RUB |
|
USD |
Non-current assets |
|
|
|
|
|
|
|
|
Goodwill |
9,875,224 |
|
|
6,954,183 |
|
|
133,674 |
|
Intangible assets |
3,439,959 |
|
|
2,733,417 |
|
|
46,564 |
|
Property and equipment |
466,725 |
|
|
429,744 |
|
|
6,318 |
|
Equity-accounted investees |
129,666 |
|
|
178,847 |
|
|
1,755 |
|
Right-of-use assets |
215,120 |
|
|
279,249 |
|
|
2,912 |
|
Deferred tax assets |
176,328 |
|
|
149,835 |
|
|
2,387 |
|
Loans issued to equity-accounted investees |
11,541 |
|
|
– |
|
|
156 |
|
Other financial assets |
25,491 |
|
|
25,341 |
|
|
345 |
|
Other non-current assets |
22,176 |
|
|
22,134 |
|
|
300 |
|
Total non-current assets |
14,362,230 |
|
|
10,772,750 |
|
|
194,411 |
|
Current assets |
|
|
|
|
|
|
|
|
Trade and other receivables |
69,120 |
|
|
57,908 |
|
|
936 |
|
Indemnification asset |
186,473 |
|
|
– |
|
|
2,524 |
|
Loans issued to equity-accounted investees (current portion) |
8,178 |
|
|
– |
|
|
111 |
|
Prepaid expenses and other current assets |
179,118 |
|
|
119,249 |
|
|
2,425 |
|
Cash and cash equivalents |
3,367,610 |
|
|
2,089,215 |
|
|
45,585 |
|
Total current assets |
3,810,499 |
|
|
2,266,372 |
|
|
51,580 |
|
Total assets |
18,172,729 |
|
|
13,039,122 |
|
|
245,991 |
|
Equity |
|
|
|
|
|
|
|
|
Share capital |
8,597 |
|
|
8,547 |
|
|
116 |
|
Share premium |
1,987,044 |
|
|
1,863,877 |
|
|
26,897 |
|
Foreign currency translation reserve |
(92,140 |
) |
|
(105,191 |
) |
|
(1,247 |
) |
Retained earnings |
1,536,137 |
|
|
1,587,697 |
|
|
20,794 |
|
Total equity attributable to owners of the
Company |
3,439,638 |
|
|
3,354,930 |
|
|
46,560 |
|
Non-controlling interest |
69,104 |
|
|
33,263 |
|
|
935 |
|
Total equity |
3,508,742 |
|
|
3,388,193 |
|
|
47,495 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Loans and borrowings |
7,791,326 |
|
|
4,064,501 |
|
|
105,465 |
|
Lease liabilities |
164,245 |
|
|
230,802 |
|
|
2,223 |
|
Deferred tax liabilities |
658,970 |
|
|
512,804 |
|
|
8,920 |
|
Trade and other payables |
178,607 |
|
|
4,239 |
|
|
2,418 |
|
Provisions |
87,822 |
|
|
19,498 |
|
|
1,189 |
|
Other non-current liabilities |
142,531 |
|
|
126,828 |
|
|
1,929 |
|
Total non-current liabilities |
9,023,501 |
|
|
4,958,672 |
|
|
122,144 |
|
Current liabilities |
|
|
|
|
|
|
|
|
Contract liabilities |
2,785,402 |
|
|
2,367,416 |
|
|
37,704 |
|
Trade and other payables |
1,273,089 |
|
|
780,219 |
|
|
17,233 |
|
Loans and borrowings (current portion) |
485,100 |
|
|
1,064,554 |
|
|
6,566 |
|
Lease liabilities (current portion) |
77,752 |
|
|
59,816 |
|
|
1,052 |
|
Income tax payable |
401,733 |
|
|
369,974 |
|
|
5,438 |
|
Provisions (current portion) |
578,651 |
|
|
26,398 |
|
|
7,833 |
|
Other current liabilities |
38,759 |
|
|
23,880 |
|
|
525 |
|
Total current liabilities |
5,640,486 |
|
|
4,692,257 |
|
|
76,351 |
|
Total liabilities |
14,663,987 |
|
|
9,650,929 |
|
|
198,495 |
|
Total equity and liabilities |
18,172,729 |
|
|
13,039,122 |
|
|
245,991 |
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Statement of Cash
Flows
For the year ended
(in thousands of RUB and USD) |
December 31,
2020 |
|
December 31,
2019 |
|
December 31,
2020 |
|
RUB |
|
RUB |
|
USD |
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income for the period |
1,885,825 |
|
|
1,581,026 |
|
|
25,527 |
|
Adjusted for non-cash items and items not affecting cash flow from
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
750,558 |
|
|
683,317 |
|
|
10,160 |
|
Net finance costs |
350,216 |
|
|
526,516 |
|
|
4,741 |
|
Net foreign exchange (gain)/loss |
(83,030 |
) |
|
46,508 |
|
|
(1,124 |
) |
Other non-cash items |
(5,509 |
) |
|
5,690 |
|
|
(75 |
) |
Management incentive agreement, including social taxes |
262,647 |
|
|
196,993 |
|
|
3,555 |
|
Share-based payments to Board of directors |
21,714 |
|
|
12,842 |
|
|
294 |
|
Share of loss of equity-accounted investees, net of income tax |
49,181 |
|
|
30,542 |
|
|
666 |
|
Income tax expense |
685,772 |
|
|
644,422 |
|
|
9,283 |
|
Change in trade receivables and other operating assets |
(19,546 |
) |
|
(90,218 |
) |
|
(264 |
) |
Change in contract liabilities |
343,903 |
|
|
307,388 |
|
|
4,655 |
|
Change in trade and other payables |
161,742 |
|
|
76,418 |
|
|
2,189 |
|
Change in other liabilities |
17,300 |
|
|
147,685 |
|
|
234 |
|
Income tax paid |
(840,021 |
) |
|
(975,656 |
) |
|
(11,371 |
) |
Interest paid |
(366,179 |
) |
|
(582,420 |
) |
|
(4,957 |
) |
Net cash generated from operating activities |
3,214,573 |
|
|
2,611,054 |
|
|
43,513 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Acquisition of subsidiary, net of cash acquired |
(3,004,299 |
) |
|
– |
|
|
(40,667 |
) |
Acquisition of equity-accounted investee |
– |
|
|
(234,730 |
) |
|
– |
|
Acquisition of intangible assets |
(77,723 |
) |
|
(97,818 |
) |
|
(1,052 |
) |
Acquisition of property and equipment |
(178,782 |
) |
|
(381,648 |
) |
|
(2,420 |
) |
Loans issued to equity-accounted investees |
(19,235 |
) |
|
|
|
|
(260 |
) |
Interest received |
52,432 |
|
|
77,079 |
|
|
710 |
|
Net cash used in investing activities |
(3,227,607 |
) |
|
(637,117 |
) |
|
(43,690 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Bank and other loan received |
4,616,478 |
|
|
– |
|
|
62,490 |
|
Non-convertible bonds issued |
4,000,000 |
|
|
– |
|
|
54,145 |
|
Bank loan origination fees |
(56,668 |
) |
|
– |
|
|
(767 |
) |
Bank and other loans repaid |
(5,397,895 |
) |
|
(1,325,000 |
) |
|
(73,067 |
) |
Payment for lease liabilities |
(59,737 |
) |
|
(61,376 |
) |
|
(809 |
) |
Dividends paid to shareholders |
(1,885,441 |
) |
|
(1,133,501 |
) |
|
(25,522 |
) |
Dividends paid to non-controlling interest |
(102,731 |
) |
|
(131,456 |
) |
|
(1,391 |
) |
Acquisition of non-controlling interest |
– |
|
|
(2,107 |
) |
|
– |
|
Contribution from non-controlling interest |
44 |
|
|
– |
|
|
1 |
|
Net cash used in financing activities |
1,114,050 |
|
|
(2,653,440 |
) |
|
15,080 |
|
Net increase/(decrease) in cash and cash
equivalents |
1,101,016 |
|
|
(679,503 |
) |
|
14,904 |
|
Cash and cash equivalents, beginning of period |
2,089,215 |
|
|
2,861,110 |
|
|
28,280 |
|
Effect of exchange rate changes on cash |
177,379 |
|
|
(92,391 |
) |
|
2,401 |
|
Cash and cash equivalents, end of period |
3,367,610 |
|
|
2,089,215 |
|
|
45,585 |
|
|
|
|
|
|
|
|
|
|
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
measures:
(in thousands of RUB) |
For the three months ended December 31, |
|
For the year ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income |
649,805 |
|
|
496,442 |
|
|
1,885,825 |
|
|
1,581,026 |
|
Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
115,326 |
|
|
101,504 |
|
|
685,772 |
|
|
644,422 |
|
Net interest costs |
72,586 |
|
|
114,079 |
|
|
350,216 |
|
|
526,516 |
|
Depreciation and amortization |
195,061 |
|
|
177,786 |
|
|
750,558 |
|
|
683,317 |
|
EBITDA |
1,032,778 |
|
|
889,811 |
|
|
3,672,371 |
|
|
3,435,281 |
|
Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
Equity-settled awards, including social taxes(1) |
82,323 |
|
|
61,891 |
|
|
249,286 |
|
|
178,953 |
|
IPO-related costs(2) |
– |
|
|
1,990 |
|
|
– |
|
|
190,284 |
|
Insurance cover related to IPO(3) |
– |
|
|
38,175 |
|
|
54,772 |
|
|
100,048 |
|
Income from depository(4) |
(12,476 |
) |
|
(8,551 |
) |
|
(41,617 |
) |
|
(22,095 |
) |
SPO-related costs (5) |
12,779 |
|
|
– |
|
|
151,087 |
|
|
– |
|
Transaction costs related to business combinations (6) |
34,275 |
|
|
– |
|
|
51,665 |
|
|
– |
|
One-off litigation settlements and legal costs(7) |
– |
|
|
17,734 |
|
|
– |
|
|
17,734 |
|
Share of loss of equity-accounted investees(8) |
10,404 |
|
|
21,958 |
|
|
49,181 |
|
|
30,542 |
|
Adjusted EBITDA |
1,160,083 |
|
|
1,023,008 |
|
|
4,186,745 |
|
|
3,930,747 |
|
(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 June
2019.(2) In connection with our initial public
offering in May 2019, we incurred expenses related to legal,
accounting and other professionalfees that are not indicative of
our ongoing expenses.(3) Subsequent to and in
connection with the IPO, we purchased a one-year insurance policy
for $2.7 million, of which we allocated $2.4 million to the cover
related to our IPO, which we believe does not relate to our
ordinary course of business, and $250 thousand to directors’ and
officers’ insurance in the ordinary course of business, based on
the estimate of our insurance provider. The cost of this insurance
policy is expensed over the policy term on a pro-rata time basis
and thus recurs in the reporting periods during its term. We have
renewed the policy for the second 12-month period which began on
May 9, 2020. Due to a decrease in IPO-related risks over time, we
believe that our D&O insurance expense in the second 12-month
period mostly relates to our ordinary course of
business.(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) Reflects legal, accounting, and other
professional fees incurred in connection with our secondary public
offering that took place in July 2020.
(6) Reflects transaction costs related to business
combination of Zarplata.ru in December
2020.(7) Represents one-off litigation costs
related to administrative proceeding with the Federal Antimonopoly
Service of Russia.(8) On May 6, 2019, we acquired
a 25.01% equity-accounted investee, LLC “Skilaz”. We believe that
share of profit or loss in equity-accounted investees is not
indicative of our core operating performance.
Reconciliation of net income to Adjusted Net
Income, the most directly comparable IFRS financial measure:
(in thousands of RUB) |
For the three months ended December 31, |
|
For the year ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income |
649,805 |
|
|
496,442 |
|
|
1,885,825 |
|
|
1,581,026 |
|
Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
Equity-settled awards, including social taxes(1) |
82,323 |
|
|
61,891 |
|
|
249,286 |
|
|
178,953 |
|
IPO-related costs(2) |
– |
|
|
1,990 |
|
|
– |
|
|
190,284 |
|
Insurance cover related to IPO(3) |
– |
|
|
38,175 |
|
|
54,772 |
|
|
100,048 |
|
Income from depositary(4) |
(12,476 |
) |
|
(8,551 |
) |
|
(41,617 |
) |
|
(22,095 |
) |
SPO-related costs(5) |
12,779 |
|
|
– |
|
|
151,087 |
|
|
– |
|
Transaction costs related to business combinations (6) |
34,275 |
|
|
– |
|
|
51,665 |
|
|
– |
|
One-off litigation settlements and legal costs(7) |
– |
|
|
17,734 |
|
|
– |
|
|
17,734 |
|
Share of loss of equity-accounted investees(8) |
10,404 |
|
|
21,958 |
|
|
49,181 |
|
|
30,542 |
|
Amortization of intangible assets recognized upon the
Acquisition(9) |
103,947 |
|
|
103,947 |
|
|
415,787 |
|
|
415,787 |
|
Net (gain)/loss on financial assets measured at fair value through
profit and loss(10) |
(8,574 |
) |
|
– |
|
|
(150 |
) |
|
– |
|
Tax effect on adjustments(11) |
(20,789 |
) |
|
(20,789 |
) |
|
(83,157 |
) |
|
(83,157 |
) |
Adjusted Net Income |
851,694 |
|
|
712,796 |
|
|
2,732,679 |
|
|
2,409,122 |
|
(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 June
2019.(2) In connection with our initial public
offering in May 2019, we incurred expenses related to legal,
accounting and other professionalfees that are not indicative of
our ongoing expenses.(3) Subsequent to and in
connection with the IPO, we purchased a one-year insurance policy
for $2.7 million, of which we allocated $2.4 million to the cover
related to our IPO, which we believe does not relate to our
ordinary course of business, and $250 thousand to directors’ and
officers’ insurance in the ordinary course of business, based on
the estimate of our insurance provider. The cost of this insurance
policy is expensed over the policy term on a pro-rata time basis
and thus recurs in the reporting periods during its term. We have
renewed the policy for the second 12-month period which began on
May 9, 2020. Due to a decrease in IPO-related risks over time, we
believe that our D&O insurance expense in the second 12-month
period mostly relates to our ordinary course of
business.(4) 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.(5) Reflects
legal, accounting, and other professional fees incurred in
connection with our secondary public offering that took place in
July 2020.(6) Reflects transaction costs related
to the acquisition of Zarplata.ru in December
2020.(7) Represents one-off litigation costs
related to administrative proceeding with the Federal Antimonopoly
Service of Russia.(8) On May 6, 2019, we acquired
a 25.01% equity-accounted investee, LLC “Skilaz”. We believe that
share of profit or loss in equity-accounted investees is not
indicative of our core operating performance.
(9) 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.(10) We believe that the movements in
fair values of financial assets measured at fair value through
profit and loss are not indicative of our underlying business
performance.(11) Calculated by applying the
statutory Russian tax rate of 20% to amortization of the assets
recognized upon the Acquisition.
Reconciliation of operating costs and expenses
(exclusive of depreciation and amortization) to Adjusted Operating
Costs and Expenses (Exclusive of Depreciation and Amortization),
the most directly comparable IFRS financial measure:
|
For the three months ended December 31, 2020 |
|
For the three months ended December 31, 2019 |
(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) |
(808,344 |
) |
|
(318,219 |
) |
|
(292,235 |
) |
|
(1,418,798 |
) |
|
(605,016 |
) |
|
(274,274 |
) |
|
(263,830 |
) |
|
(1,143,120 |
) |
Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-settled awards, including social taxes(1) |
82,323 |
|
|
– |
|
|
– |
|
|
82,323 |
|
|
61,891 |
|
|
– |
|
|
– |
|
|
61,891 |
|
IPO-related costs(2) |
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
1,990 |
|
|
1,990 |
|
Insurance cover related to IPO(3) |
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
38,175 |
|
|
38,175 |
|
SPO-related costs(4) |
6,693 |
|
|
– |
|
|
6,087 |
|
|
12,779 |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
Transaction costs related to business combinations(5) |
3,042 |
|
|
– |
|
|
31,233 |
|
|
34,275 |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
One-off litigation settlements and legal costs(6) |
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
17,734 |
|
|
17,734 |
|
Adjusted Operating Costs and Expenses (Exclusive of
Depreciation and Amortization) |
(716,286 |
) |
|
(318,219 |
) |
|
(254,915 |
) |
|
(1,289,420 |
) |
|
(543,125 |
) |
|
(274,274 |
) |
|
(205,931 |
) |
|
(1,023,330 |
) |
(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 June
2019.(2) In connection with our initial public offering
in May 2019, we incurred expenses related to legal, accounting and
other professionalfees that are not indicative of our ongoing
expenses.(3) Subsequent to and in connection with
the IPO, we purchased a one-year insurance policy for $2.7 million,
of which we allocated $2.4 million to the cover related to our IPO,
which we believe does not relate to our ordinary course of
business, and $250 thousand to directors’ and officers’ insurance
in the ordinary course of business, based on the estimate of our
insurance provider. The cost of this insurance policy is expensed
over the policy term on a pro-rata time basis and thus recurs in
the reporting periods during its term. We have renewed the policy
for the second 12-month period which began on May 9, 2020. Due to a
decrease in IPO-related risks over time, we believe that our
D&O insurance expense in the second 12-month period mostly
relates to our ordinary course of
business.(4) Reflects legal, accounting, and other
professional fees incurred in connection with our secondary public
offering that took place in July 2020.(5) Reflects
transaction costs related to the acquisition of Zarplata.ru in
December 2020.(6) Represents one-off litigation costs
related to administrative proceeding with the Federal Antimonopoly
Service of Russia.
We believe that Net Working Capital is a useful
metric to assess our ability to service debt, fund new investment
opportunities, distribute dividends to our shareholders and assess
our working capital requirements.
Calculation of our Net Working Capital is
presented in the table below:
(in thousands of RUB) |
December 31, 2020 |
|
December 31, 2019 |
Trade and other receivables |
69,120 |
|
|
57,908 |
|
Prepaid expenses and other current assets |
179,118 |
|
|
119,249 |
|
Contract liabilities |
(2,785,402 |
) |
|
(2,367,416 |
) |
Trade and other payables |
(1,273,089 |
) |
|
(780,219 |
) |
Other current liabilities |
(38,759 |
) |
|
(23,880 |
) |
Net Working Capital |
(3,849,012 |
) |
|
(2,994,358 |
) |
|
|
|
|
|
|
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) |
December 31, 2020 |
|
December 31, 2019 |
Loans and borrowings |
7,791,326 |
|
|
4,064,501 |
|
Loans and borrowings (current portion) |
485,100 |
|
|
1,064,554 |
|
Cash and cash equivalents |
(3,367,610 |
) |
|
(2,089,215 |
) |
Net Debt |
4,908,816 |
|
|
3,039,840 |
|
|
|
|
|
|
|
We calculate our Net Debt to Adjusted EBITDA
Ratio by dividing Net Debt by Adjusted EBITDA.
|
December 31, 2020 |
|
December 31, 2019 |
Net Debt |
4,908,816 |
|
3,039,840 |
Adjusted EBITDA |
4,186,745 |
|
3,930,747 |
Net Debt to Adjusted EBITDA Ratio |
1.2x |
|
0.8x |
|
|
|
|
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