HeadHunter Group PLC (Nasdaq: HHR, MOEX: HHRU) announced today its
financial results for the quarter ended June 30, 2021. As used
below, references to “we,” “our,” “us” or the “Company” or similar
terms shall mean HeadHunter Group PLC.
Second Quarter 2021 Financial and Operational
Highlights
| (in millions of
RUB(1) and USD(2)) |
Three months ended June 30,
2021 |
Three months ended June 30,
2020 |
Change(3) |
Three months ended June 30,
2021 |
|
RUB |
RUB |
|
USD(4) |
| Revenue |
3,911 |
1,534 |
155.0% |
54.0 |
| Russia Segments(6) Revenue |
3,593 |
1,421 |
152.8% |
49.6 |
| Net Income |
1,279 |
239 |
435.1% |
17.7 |
| Net Income Margin, % |
32.7% |
15.6% |
17.1 ppts |
|
| Adjusted EBITDA(5)(7) |
2,264 |
666 |
239.9% |
31.3 |
| Adjusted EBITDA Margin,
%(5)(7) |
57.9% |
43.4% |
14.5 ppts |
|
| Adjusted Net Income(5)(7) |
1,603 |
358 |
347.1% |
22.1 |
| Adjusted Net Income Margin,
%(5)(7) |
41.0% |
23.4% |
17.6 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 June 30, 2021 (RUB
72.3723 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 from the nearest IFRS measure.(6) Includes our
“Russia (hh.ru)” and “Russia (Zarplata.ru)” operating segments
revenue.(7) Beginning from the first quarter of 2021, we modified
the presentation of Adjusted EBITDA and Adjusted Net Income, our
non-IFRS measures, to exclude the impact of foreign exchange gains
and losses. Prior period amounts have been reclassified to conform
to this presentation. Please see “Modification of the presentation
of Adjusted EBITDA and Adjusted Net Income” and “Use of Non-IFRS
Financial Measures” elsewhere in this release.
-
Revenue is up 155.0% mostly due to strong demand for candidates
driving up the number of paying customers and the average
consumption, as well as the low base effect, and the consolidation
of acquired subsidiaries.
- Net income is up
435.1% driven by the increase in revenue.
- Adjusted EBITDA
is up 239.9% and Adjusted EBITDA Margin is up from 43.4% to 57.9%
mainly due to the increase in revenue. Margin expansion in our
“Russia (hh.ru)” segment slightly diluted by consolidation of
acquired subsidiaries.
|
|
|
|
|
|
|
|
|
| (in millions of RUB
and USD) |
As ofJune 30, 2021 |
|
As of December 31, 2020 |
|
Change |
|
As ofJune 30, 2021 |
|
RUB |
|
RUB |
|
|
|
USD |
| Net Working Capital(1) |
(4,832) |
|
(3,849) |
|
25.5% |
|
(66.8) |
| Net Debt(1) (3) |
2,592 |
|
4,909 |
|
(47.2)% |
|
35.8 |
| Net Debt to Adjusted EBITDA
Ratio(1) (3) |
0.4x |
|
1.2x |
|
|
|
|
(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 calculation of
these measures
(2) For the purposes of calculation of this ratio as of June 30,
2021, Adjusted EBITDA is calculated on the last twelve months
basis.
(3) In July 2021 we settled ca. RUB 2 billion dividend payable
in cash, which affected our Net Debt and Net Debt to Adjusted
EBITDA Ratio measures if measured immediately after the payment
(see “Dividend” elsewhere in this release).
- Net Working
Capital as of June 30, 2021 decreased by ₽983 million, or 25.5%,
compared to December 31, 2020, primarily due to (i) an increase in
contract liabilities by ₽583 million from customer prepayments,
(ii) an increase in trade and other payables (current portion), and
(iii) ₽155 million consideration payable for the acquisition of a
9.97% stake in Skillaz.
- Net Debt
decreased by ₽2,317 million, or 47.2%, primarily due to cash
generated from operating activities (see “Cash Flows”).
- Net Debt to
Adjusted EBITDA Ratio decreased from 1.2x to 0.4x, due to the
decrease in Net Debt and the increase in Adjusted EBITDA.
Mikhail Zhukov, Chief Executive Officer of
HeadHunter Group PLC: "We had an exceptionally strong quarter,
where we demonstrated the scalability of our business model and our
commitment to long-term product development. We look forward to
remaining the most effective digital recruitment solution for many
thousands of clients as they recover from last year’s turbulence
and now face an unprecedented labor supply scarcity.”
Acquisition of Zarplata.ru and Skillaz
In December 2020, we acquired 100% ownership
interest in LLC “Zarplata.ru” (“Zarplata.ru”), a job classified
platform with a strong footprint in certain Russian regions, such
as Siberia and Ural. From January 1, 2021, our statement of income
and comprehensive income includes results of Zarplata.ru. This
affects year-on-year comparisons of our revenue, operating
expenses, and other metrics in 2021. For the purposes of analysis
of our key performance indicators, such as the number of paying
customers and the average revenue per customer (“ARPC”), we combine
our “Russia (hh.ru)” and “Russia (Zarplata.ru)” (collectively
“Russia segments”) revenues, as we believe that our combined ARPC
and combined number of paying customers allows us to assess better
our results and position on Russian online recruitment market, on
which both these segments operate.
As of March 31, 2021, we obtained control over
LLC “Skillaz”, a Russian HR technology company which automates and
enhances recruitment processes by delivering sophisticated and
flexible software as a service (“SaaS”) solutions (“Skillaz”), as
our call option to acquire a further 40.01% ownership interest in
Skillaz (in addition to our 25.01% stake already acquired) became
beneficial. On May 26, 2021, we exercised the option and acquired
the 40.01% stake, and on June 28, 2021 we acquired additional
9.97%, thus increasing our total ownership interest in Skillaz to
74.99%. From April 1, 2021, our statement of income and
comprehensive income includes results of Skillaz. This affects
year-on-year comparisons of our revenue and operating expenses in
2021. For the purposes of analysis of our key performance
indicators, such as the number of paying customers and the average
revenue per customer (“ARPC”), we included Skillaz in our “Other
segments”.
Modification of the presentation of
Adjusted EBITDA and Adjusted Net Income
Beginning from the first quarter of 2021, we
modified the presentation of Adjusted EBITDA and Adjusted Net
Income, our non-IFRS measures, to exclude the impact of foreign
exchange gains and losses as the nature of such gains and losses is
not operational. We believe this revised presentation will provide
a better understanding of our operating performance and a more
meaningful comparison of our results between periods.
Prior period amounts have been reclassified to
conform to this presentation. These changes have no impact on any
of the previously reported IFRS results for any periods
presented.
The following tables present the effects of the
changes on the presentation of non-IFRS measures as reflected in
the Company's previous reports:
|
|
|
|
(in millions of RUB) |
For the three months ended June 30, 2020 |
|
|
Non-IFRS Prior Presentation |
|
|
Net foreign exchange gain and related income tax
effect |
|
|
Non-IFRS Revised Presentation |
|
|
Adjusted EBITDA |
685 |
|
|
(19 |
) |
|
666 |
|
|
Adjusted EBITDA Margin, % |
44.7 |
% |
|
(1.3 |
%) |
|
43.4 |
% |
|
Adjusted Net Income |
412 |
|
|
(54 |
) |
|
358 |
|
|
Adjusted Net Income Margin, % |
26.9 |
% |
|
(3.5 |
%) |
|
23.4 |
% |
|
(in millions of RUB) |
For the six months ended June 30, 2020 |
|
|
Non-IFRS Prior Presentation |
|
|
Net foreign exchange gain and relatedincome tax
effect |
|
|
Non-IFRS Revised Presentation |
|
|
Adjusted EBITDA |
1,731 |
|
|
(95 |
) |
|
1,636 |
|
|
Adjusted EBITDA Margin, % |
49.1 |
% |
|
(2.7 |
%) |
|
46.4 |
% |
|
Adjusted Net Income |
1,025 |
|
|
(85 |
) |
|
940 |
|
|
Adjusted Net Income Margin, % |
29.1 |
% |
|
(2.4 |
%) |
|
26.7 |
% |
|
(in millions of RUB) |
For the year ended December 31, 2020 |
|
|
Non-IFRS PriorPresentation |
|
|
Net foreign exchange gain and related income tax
effect |
|
|
Non-IFRS Revised Presentation |
|
|
Adjusted EBITDA |
4,187 |
|
|
(83 |
) |
|
4,104 |
|
|
Adjusted EBITDA Margin, % |
50.6 |
% |
|
(1.1 |
%) |
|
49.5 |
% |
|
Adjusted Net Income |
2,733 |
|
|
(50 |
) |
|
2,683 |
|
|
Adjusted Net Income Margin, % |
33.0 |
% |
|
(0.6 |
%) |
|
32.4 |
% |
Impact of COVID-19 on Our Operations and Financial
Position
The ongoing COVID-19 pandemic can affect our
financial results mostly via decrease in business activity in
Russia, especially on the back of measures taken by authorities to
curb spread of the disease, such as shelter-in-place orders,
non-working days announcements and businesses closures. A decrease
in business activity may result in a decrease in a number of job
postings advertised by our customers and the number of CV database
subscriptions purchased or renewed, leading to a decrease in our
revenues.
The most severe restrictions in Russia were in
place from March 30, 2020 to May 11, 2020, when a nation-wide
period of non-working days was introduced, and shelter-in-place
orders were in effect in Moscow. This affected our revenue in the
end of the first quarter of 2020 and in the second quarter of 2020.
A gradual recovery of business activities followed in the third and
fourth quarters of 2020, resulting
in a recovery in our KPIs.
No such restrictions had
been introduced since, except until a period of four working
days from May 4, 2021 to May 7, 2021 was announced as a
period of non-working days. This was a similar but much
smaller measure to the period of non-working days in
2020. Accordingly, we have seen no measurable impact of COVID-19 on
our financial results for the second quarter of 2021 and our
financial position as of June 30, 2021. Year-to-year comparison of
our financial results for the second and, prospectively, third
quarter of 2021 is colored by the low base effect of the
corresponding periods in 2020. However, 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 or
other subdivisions as presented in internal reporting to our chief
operating decision-maker (“CODM”). Our operating segments include
“Russia (hh.ru),” “Russia (Zarplata.ru),” “Belarus,” “Kazakhstan”,
“Skillaz” and other segments. As each segment, other than “Russia
(hh.ru)” and “Russia (Zarplata.ru)”, individually comprises less
than 10% of our revenue, for reporting purposes we combine all
segments other than “Russia (hh.ru)” and “Russia (Zarplata.ru)”
into the “Other segments” category.
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
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 (hh.ru)” segment
in 2019 was 21.6% (in 2020, this metric was not indicative due to
COVID-19).
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 2019 to 2021. In 2021,
compared to 2020, there is one business day less in the first
quarter and in the total year, two business days more in the second
quarter, and two business days less in the fourth quarter, meaning
that a negative calendar effect is expected in each of the first
and fourth quarter, and a positive effect is expected in the second
quarter:
| |
Number of business days |
|
As % of total business days per year |
|
|
2021 |
|
2020 |
|
2019 |
|
2021 |
|
|
2020 |
|
|
2019 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter |
56 |
|
57 |
|
57 |
|
22.7 |
% |
|
23.0 |
% |
|
23.1 |
% |
| Second quarter |
62 |
|
60 |
|
59 |
|
25.1 |
% |
|
24.2 |
% |
|
23.9 |
% |
| Third quarter |
66 |
|
66 |
|
66 |
|
26.7 |
% |
|
26.6 |
% |
|
26.7 |
% |
| Fourth quarter |
63 |
|
65 |
|
65 |
|
25.5 |
% |
|
26.2 |
% |
|
26.3 |
% |
| Year |
247 |
|
248 |
|
247 |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
The positive effect from two extra working days
in the second quarter of 2021 was not meaningful compared to more
significant change drivers observed during the quarter.
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 second quarter segment
external expenses in our “Russia (hh.ru)” segment in 2019 and 2020
were 23.1% and 20.9%, respectively, of total “Russia (hh.ru)”
segment external expenses for the year.
Net income and Adjusted EBITDA
Even though our revenue remains relatively
stable throughout each quarter, seasonal revenue fluctuations, as
described above, affect our net income. As a result of revenue
seasonality, our profitability in the first quarter is usually
lower than in other quarters and for the full year, because our
expenses as a percentage of revenue are usually higher in the first
quarter due to lower revenue. Our profitability is also affected by
our decisions on timing of expenses, as described above.
Contract liabilities
Our contract liabilities are mostly affected by
the annual subscriptions’ renewal cycle in our Key Accounts
customer segment. A substantial number of our Key Accounts renew
their subscriptions in the first quarter but prepay us in the
fourth quarter of a previous year, as per our normal payment terms.
As a result, we receive substantial prepayments from our customers
in the fourth quarter which causes a consequential increase in our
contract liabilities at the end of that quarter. For example, our
contract liabilities as of 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 costs and expenses
(exclusive of depreciation and amortization)”), and to a lesser
extent by payment terms provided to us by our largest suppliers,
such as TV advertising agencies and others.
Net Working Capital
Our Net Working Capital is primarily affected by
changes in our contract liabilities. 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.
Second Quarter 2021 Results
Our revenue was ₽3,911 million for the three
months ended June 30, 2021 compared to ₽1,534 million for the three
months ended June 30, 2020. Revenue for the three months ended June
30, 2021 increased by ₽2,377 million, or 155.0%, while the compound
average growth rate(*) (“CAGR”) from 2019 to 2021 in the second
quarter of 2021 was 43.4%, reflecting acceleration of growth
compared to historical averages. Revenue has increased primarily
due to the increase in all key operating metrics across customer
segments on the back of strong demand for candidates, as well as
due to low base effect, our monetization initiatives, and
consolidation of acquired subsidiaries.
The following table breaks down revenue by product for the
periods indicated:
| |
For the three months ended June 30, |
|
Change |
|
CAGR |
|
|
(in thousands of RUB) |
2021 |
|
2020 |
|
2019 |
|
2021/2020 |
|
|
2021/2019 |
|
|
2019-2021 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bundled Subscriptions |
1,021,864 |
|
524,497 |
|
554,090 |
|
94.8 |
% |
|
84.4 |
% |
|
35.8 |
% |
| CV Database Access |
806,933 |
|
346,981 |
|
433,742 |
|
132.6 |
% |
|
86.0 |
% |
|
36.4 |
% |
| Job Postings |
1,700,108 |
|
505,119 |
|
769,115 |
|
236.6 |
% |
|
121.0 |
% |
|
48.7 |
% |
| Other value-added
services |
382,278 |
|
157,238 |
|
144,677 |
|
143.1 |
% |
|
164.2 |
% |
|
62.6 |
% |
| Total
revenue |
3,911,183 |
|
1,533,835 |
|
1,901,624 |
|
155.0 |
% |
|
105.7 |
% |
|
43.4 |
% |
| |
For the six months ended June 30, |
|
Change |
|
CAGR |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of RUB) |
2021 |
|
2020 |
|
2019 |
|
2021/2020 |
|
|
2021/2019 |
|
|
2019-2021 |
|
| Bundled Subscriptions |
1,788,331 |
|
1,102,210 |
|
1,057,975 |
|
62.2 |
% |
|
69.0 |
% |
|
30.0 |
% |
| CV Database Access |
1,395,898 |
|
817,567 |
|
819,389 |
|
70.7 |
% |
|
70.4 |
% |
|
30.5 |
% |
| Job Postings |
2,944,619 |
|
1,286,532 |
|
1,410,986 |
|
128.9 |
% |
|
108.7 |
% |
|
44.5 |
% |
| Other value-added
services |
623,449 |
|
317,935 |
|
291,711 |
|
96.1 |
% |
|
113.7 |
% |
|
46.2 |
% |
| Total
revenue |
6,752,297 |
|
3,524,244 |
|
3,580,061 |
|
91.6 |
% |
|
88.6 |
% |
|
37.3 |
% |
(*) Given low base effect on the back of
COVID-19 restrictions in the second quarter of 2020, in addition to
year-on-year growth to 2020, we present growth to 2019 and CAGR
over two years 2019-2021. We believe that these metrics are useful
to assess revenue growth in 2021. Please, note that when commenting
on change drivers throughout this release, we are commenting on
year-on-year growth to 2020.
We calculate two-year 2019-2021 CAGR as
((S1/S0)½-1)*100%, where S0 and S1 are values for 2019 and 2021,
respectively.
The following tables sets forth our revenue, number of paying
customers and ARPC, broken down by type of customer and region, for
the periods indicated:
| |
For the three months ended June
30, |
|
Change |
|
|
CAGR |
|
|
|
2021 |
|
2020 |
|
2019 |
|
2021/2020 |
|
|
2021/2019 |
|
|
2019-2021 |
|
| Revenue (in
thousands of RUB) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Key Accounts in
Russia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
875,549 |
|
433,024 |
|
491,334 |
|
102.2 |
% |
|
78.2 |
% |
|
33.5 |
% |
|
Other regions of Russia |
329,932 |
|
171,221 |
|
151,847 |
|
92.7 |
% |
|
117.3 |
% |
|
47.4 |
% |
|
Sub-total |
1,205,481 |
|
604,245 |
|
643,181 |
|
99.5 |
% |
|
87.4 |
% |
|
36.9 |
% |
| Small and
Medium Accounts in Russia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
1,205,294 |
|
415,921 |
|
631,218 |
|
189.8 |
% |
|
90.9 |
% |
|
38.2 |
% |
|
Other regions of Russia |
1,044,849 |
|
323,099 |
|
397,969 |
|
223.4 |
% |
|
162.5 |
% |
|
62.0 |
% |
|
Sub-total |
2,250,143 |
|
739,020 |
|
1,029,187 |
|
204.5 |
% |
|
118.6 |
% |
|
47.9 |
% |
| Foreign customers of Russia
segment |
25,499 |
|
11,856 |
|
15,922 |
|
115.1 |
% |
|
60.1 |
% |
|
26.6 |
% |
| Other customers in Russia |
111,860 |
|
66,353 |
|
69,446 |
|
68.6 |
% |
|
61.1 |
% |
|
26.9 |
% |
|
Total for “Russia”
operating segments |
3,592,983 |
|
1,421,474 |
|
1,757736 |
|
152.8 |
% |
|
104.4 |
% |
|
43.0 |
% |
| Other segments |
318,199 |
|
112,361 |
|
143,888 |
|
183.2 |
% |
|
121.1 |
% |
|
48.7 |
% |
|
Total revenue |
3,911,182 |
|
1,533,835 |
|
1,901,624 |
|
155.0 |
% |
|
105.7 |
% |
|
43.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Number of paying
customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Key
Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
5,227 |
|
4,258 |
|
4,589 |
|
22.8 |
% |
|
13.9 |
% |
|
6.7 |
% |
|
Other regions of Russia |
5,782 |
|
4,704 |
|
4,408 |
|
22.9 |
% |
|
31.2 |
% |
|
14.5 |
% |
|
Key Accounts, total |
11,009 |
|
8,962 |
|
8,997 |
|
22.8 |
% |
|
22.4 |
% |
|
10.6 |
% |
| Small and Medium
Accounts |
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
89,025 |
|
44,719 |
|
63,092 |
|
99.1 |
% |
|
41.1 |
% |
|
18.8 |
% |
|
Other regions of Russia |
144,950 |
|
64,472 |
|
77,055 |
|
124.8 |
% |
|
88.1 |
% |
|
37.2 |
% |
|
Small and Medium Accounts,
total |
233,975 |
|
109,191 |
|
140,147 |
|
114.3 |
% |
|
66.9 |
% |
|
29.2 |
% |
| Foreign customers of Russia
segments |
1,525 |
|
540 |
|
1,893 |
|
182.4 |
% |
|
(19.4 |
)% |
|
(10.2 |
)% |
|
Total for “Russia”
operating segments |
246,509 |
|
118,693 |
|
151,037 |
|
107.7 |
% |
|
63.2 |
% |
|
27.8 |
% |
| Other segments, total |
16,215 |
|
8,523 |
|
13,190 |
|
90.2 |
% |
|
22.9 |
% |
|
10.9 |
% |
|
Total number of paying
customers |
262,724 |
|
127,216 |
|
164,227 |
|
106.5 |
% |
|
60.0 |
% |
|
26.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ARPC (in
RUB) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Key
Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
167,505 |
|
101,697 |
|
107,068 |
|
64.7 |
% |
|
56.4 |
% |
|
25.1 |
% |
|
Other regions of Russia |
57,062 |
|
36,399 |
|
34,448 |
|
56.8 |
% |
|
65.6 |
% |
|
28.7 |
% |
|
Key Accounts,
total |
109,500 |
|
67,423 |
|
71,488 |
|
62.4 |
% |
|
53.2 |
% |
|
23.8 |
% |
| |
|
|
|
|
|
|
|
|
|
| Small and Medium
Accounts |
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
13,539 |
|
9,301 |
|
10,005 |
|
45.6 |
% |
|
35.3 |
% |
|
16.3 |
% |
|
Other regions of Russia |
7,208 |
|
5,011 |
|
5,165 |
|
43.8 |
% |
|
39.6 |
% |
|
18.1 |
% |
|
Small and
Medium Accounts, total |
9,617 |
|
6,768 |
|
7,344 |
|
42.1 |
% |
|
31.0 |
% |
|
14.4 |
% |
| Other segments, total |
19,624 |
|
13,183 |
|
10,909 |
|
48.9 |
% |
|
79.9 |
% |
|
34.1 |
% |
In the second quarter of 2021, compared to the second quarter of
2020:
- In our Key Accounts customer segment, revenue has increased by
99.5%, or by 36.9% on a two-year CAGR basis, primarily due to the
increase in ARPC.
- ARPC in our Key Accounts customer segment has increased by
62.4%, or by 23.8% on a two-year CAGR basis. This was driven by the
increase in average consumption and, to slightly lower extent, by
our monetization improvements. Average consumption was driven
mostly by competition for candidates, as the number of jobs
advertised has increased more rapidly than the number of job
seekers in active search. To sustain a stream of candidates, some
customers increased their spending by more frequently renewing
their job postings, driving average postings consumption up, which
may be a temporary effect depending on future development of job
seeker and employer activity. In addition, average postings
consumption was driven by slightly elevated number of job postings
advertised per employer, which we believe reflects high demand in
momentum, but may also be a temporary effect. Monetization
improvements mostly related to additional revenues received from
top-up contacts within new limited model in subscription products,
as well as annual price inflation and gradual reduction in
discounts.
- The number of paying customers in our Key Accounts customer
segment has increased by 22.8%, or by 10.6% on a two-year CAGR
basis. This was a result of (i) low base effect, when some
customers decided not to use our services in the second quarter
2020 due to COVID-19 restrictions, and (ii) new customer
acquisitions.
- In our Small and Medium Accounts customer segment, revenue has
increased by 204.5%, or by 47.9% on a two-year CAGR basis, driven
by the increase in the number of paying customers and the increase
in ARPC.
- The number of paying customers in our Small and Medium Accounts
customer segment has increased by 114.3%, or by 29.2% on a two-year
CAGR basis. This was driven by (i) low base effect, when some
customers decided not to use our services in the second quarter
2020 due to COVID-19 restrictions, (ii) new customer acquisitions,
and (iii) the addition of customers of our “Russia (Zarplata.ru)”
operating segment. We observe historically high number of new
customer onboarding, which we believe is driven by economic
recovery, simplifications in customer onboarding requirements that
we introduced in 2020, as well as increased adoption of online
services on the back of COVID-19.
- ARPC in our Small and Medium Accounts customer segment has
increased by 42.1%, or by 14.4% on a two-year CAGR basis. This was
driven primarily by the increase in average postings consumption
driven by competition for candidates, due to factors explained
above for the Key Accounts customer segment.
The following tables sets forth our revenue, number of paying
customers and ARPC, broken down by type of customer and region, for
the periods indicated:
| |
For the six months ended June
30, |
|
Growth |
|
CAGR |
|
|
2021 |
|
2020 |
|
2019 |
|
2021/2020 |
|
|
2021/2019 |
|
|
2019-2021 |
|
| Revenue (in
thousands of RUB) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Key Accounts in
Russia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
1,518,487 |
|
928,422 |
|
928,697 |
|
63.6 |
% |
|
63.5 |
% |
|
27.9 |
% |
|
Other regions of Russia |
589,798 |
|
364,174 |
|
285,586 |
|
62.0 |
% |
|
106.5 |
% |
|
43.7 |
% |
|
Sub-total |
2,108,285 |
|
1,292,596 |
|
1,214,283 |
|
63.1 |
% |
|
73.6 |
% |
|
31.8 |
% |
| Small and
Medium Accounts in Russia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
2,091,572 |
|
1,043,680 |
|
1,198,438 |
|
100.4 |
% |
|
74.5 |
% |
|
32.1 |
% |
|
Other regions of Russia |
1,807,908 |
|
749,506 |
|
734,739 |
|
141.2 |
% |
|
146.1 |
% |
|
56.9 |
% |
|
Sub-total |
3,899,480 |
|
1,793,186 |
|
1,933,177 |
|
117.5 |
% |
|
101.7 |
% |
|
42.0 |
% |
| Foreign customers of Russia
segment |
45,482 |
|
27,731 |
|
30,030 |
|
64.0 |
% |
|
51.5 |
% |
|
23.1 |
% |
| Other customers in Russia |
201,679 |
|
146,205 |
|
135,761 |
|
37.9 |
% |
|
48.6 |
% |
|
21.9 |
% |
|
Total for “Russia”
operating segments |
6,254,926 |
|
3,259,718 |
|
3,313,251 |
|
91.9 |
% |
|
88.8 |
% |
|
37.4 |
% |
| Other segments |
497,371 |
|
264,526 |
|
266,810 |
|
88.0 |
% |
|
86.4 |
% |
|
36.5 |
% |
|
Total revenue |
6,752,297 |
|
3,524,244 |
|
3,580,061 |
|
91.6 |
% |
|
88.6 |
% |
|
37.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
| Number of paying
customers |
|
|
|
|
|
|
|
|
|
| Key
Accounts |
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
5,583 |
|
4,937 |
|
5,013 |
|
13.1 |
% |
|
11.4 |
% |
|
5.5 |
% |
|
Other regions of Russia |
6,229 |
|
5,424 |
|
4,841 |
|
14.8 |
% |
|
28.7 |
% |
|
13.4 |
% |
|
Key Accounts, total |
11,812 |
|
10,361 |
|
9,854 |
|
14.0 |
% |
|
19.9 |
% |
|
9.5 |
% |
| Small and Medium
Accounts |
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
117,658 |
|
77,861 |
|
85,493 |
|
51.1 |
% |
|
37.6 |
% |
|
17.3 |
% |
|
Other regions of Russia |
192,856 |
|
105,728 |
|
105,612 |
|
82.4 |
% |
|
82.6 |
% |
|
35.1 |
% |
|
Small and Medium Accounts,
total |
310,514 |
|
183,589 |
|
191,105 |
|
69.1 |
% |
|
62.5 |
% |
|
27.5 |
% |
| Foreign customers of Russia
segments |
1,964 |
|
981 |
|
2,607 |
|
100.2 |
% |
|
(24.7 |
)% |
|
(13.2 |
)% |
|
Total for
“Russia” operating segments |
324,290 |
|
194,931 |
|
203,566 |
|
66.4 |
% |
|
59.3 |
% |
|
26.2 |
% |
| Other segments, total |
20,486 |
|
15,472 |
|
17,250 |
|
32.4 |
% |
|
18.8 |
% |
|
9.0 |
% |
|
Total number of
paying customers |
344,776 |
|
210,403 |
|
220,816 |
|
63.9 |
% |
|
56.1 |
% |
|
25.0 |
% |
| |
|
|
|
|
|
|
|
|
|
| ARPC (in
RUB) |
|
|
|
|
|
|
|
|
|
| Key
Accounts |
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
271,984 |
|
188,054 |
|
185,258 |
|
44.6 |
% |
|
46.8 |
% |
|
21.2 |
% |
|
Other regions of Russia |
94,686 |
|
67,141 |
|
58,993 |
|
41.0 |
% |
|
60.5 |
% |
|
26.7 |
% |
|
Key Accounts,
total |
178,487 |
|
124,756 |
|
123,227 |
|
43.1 |
% |
|
44.8 |
% |
|
20.4 |
% |
| Small and Medium
Accounts |
|
|
|
|
|
|
|
|
|
|
Moscow and St. Petersburg |
17,777 |
|
13,404 |
|
14,018 |
|
32.6 |
% |
|
26.8 |
% |
|
12.6 |
% |
|
Other regions of Russia |
9,374 |
|
7,089 |
|
6,957 |
|
32.2 |
% |
|
34.7 |
% |
|
16.1 |
% |
|
Small and
Medium Accounts, total |
12,558 |
|
9,767 |
|
10,116 |
|
28.6 |
% |
|
24.1 |
% |
|
11.4 |
% |
| Other segments, total |
24,279 |
|
17,097 |
|
15,467 |
|
42.0 |
% |
|
57.0 |
% |
|
25.3 |
% |
Operating costs
and expenses (exclusive
of depreciation and amortization)
Operating costs and expenses (exclusive of
depreciation and amortization) were ₽1,838 million for the three
months ended June 30, 2021, compared to ₽951 million for the three
months ended June 30, 2020, representing an increase of
₽887 million, or 93.2%.
The following table sets forth operating costs and expenses
(exclusive of depreciation and amortization) for the periods
indicated:
| (in thousands of RUB) |
For the three months ended June
30, |
|
For the six months ended June
30, |
|
|
2021 |
|
|
2020 |
|
|
Change |
|
|
2021 |
|
|
2020 |
|
|
Change |
|
| Personnel expenses |
(1,053,550 |
) |
|
(540,508 |
) |
|
94.9 |
% |
|
(1,899,259 |
) |
|
(1,121,745 |
) |
|
69.3 |
% |
| Marketing expenses |
(358,689 |
) |
|
(234,394 |
) |
|
53.0 |
% |
|
(800,459 |
) |
|
(552,260 |
) |
|
44.9 |
% |
| Other general and
administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subcontractors and other expenses related to provision of
services |
(112,161 |
) |
|
(40,648 |
) |
|
175.9 |
% |
|
(162,564 |
) |
|
(77,828 |
) |
|
108.9 |
% |
|
Office rent and maintenance |
(74,478 |
) |
|
(33,755 |
) |
|
120.6 |
% |
|
(130,702 |
) |
|
(80,035 |
) |
|
63.3 |
% |
|
Professional services |
(114,111 |
) |
|
(37,723 |
) |
|
202.5 |
% |
|
(174,950 |
) |
|
(116,870 |
) |
|
49.7 |
% |
|
Insurance expense |
(42,903 |
) |
|
(43,870 |
) |
|
(2.2 |
)% |
|
(88,975 |
) |
|
(87,043 |
) |
|
2.2 |
% |
|
Hosting and other web-site maintenance |
(22,773 |
) |
|
(10,549 |
) |
|
115.9 |
% |
|
(37,233 |
) |
|
(22,583 |
) |
|
64.9 |
% |
|
Other operating expenses |
(59,195 |
) |
|
(9,618 |
) |
|
515.5 |
% |
|
(112,367 |
) |
|
(31,320 |
) |
|
258.8 |
% |
|
Operating costs and expenses (exclusive of depreciation and
amortization) |
(1,837,860 |
) |
|
(951,065 |
) |
|
93.2 |
% |
|
(3,406,509 |
) |
|
(2,089,684 |
) |
|
63.0 |
% |
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 June
30, |
|
For the six months ended June
30, |
|
|
2021 |
|
|
2020 |
|
|
Change |
|
|
2021 |
|
|
2020 |
|
|
Change |
|
| Personnel expenses |
26.9 |
% |
|
35.2 |
% |
|
(8.3 |
)% |
|
28.1 |
% |
|
31.8 |
% |
|
(3.7 |
)% |
| Marketing expenses |
9.2 |
% |
|
15.3 |
% |
|
(6.1 |
)% |
|
11.9 |
% |
|
15.7 |
% |
|
(3.8 |
)% |
| Other general and
administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subcontractors and other expenses related to provision of
services |
2.9 |
% |
|
2.7 |
% |
|
0.2 |
% |
|
2.4 |
% |
|
2.2 |
% |
|
0.2 |
% |
| Office rent and
maintenance |
1.9 |
% |
|
2.2 |
% |
|
(0.3 |
)% |
|
1.9 |
% |
|
2.3 |
% |
|
(0.3 |
)% |
| Professional services |
2.9 |
% |
|
2.5 |
% |
|
0.5 |
% |
|
2.6 |
% |
|
3.3 |
% |
|
(0.7 |
)% |
| Insurance expense |
1.1 |
% |
|
2.9 |
% |
|
(1.8 |
)% |
|
1.3 |
% |
|
2.5 |
% |
|
(1.2 |
)% |
| Hosting and other web-site
maintenance |
0.6 |
% |
|
0.7 |
% |
|
(0.1 |
)% |
|
0.6 |
% |
|
0.6 |
% |
|
(0.1 |
)% |
| Other operating expenses |
1.5 |
% |
|
0.6 |
% |
|
0.9 |
% |
|
1.7 |
% |
|
0.9 |
% |
|
0.8 |
% |
|
Operating costs and expenses (exclusive of depreciation and
amortization) |
47.0 |
% |
|
62.0 |
% |
|
(15.0 |
)% |
|
50.4 |
% |
|
59.3 |
% |
|
(8.8 |
)% |
Personnel expenses
Personnel expenses for the three months ended
June 30, 2021 increased by ₽513 million, or 94.9%, compared to the
three months ended June 30, 2020 primarily due to: (i) addition of
personnel expenses of Zarplata.ru and Skillaz; (ii) low base
effect, including our cost savings initiatives in the second
quarter of 2020 not occurring in the second quarter of 2021, and
our sales team bonuses reaching bottom-end in the second quarter of
2020 on the back of significant underperformance in revenue
relative to sales teams’ targets, and top-end in the second quarter
of 2021 on the back of significant overperformance relative to the
targets; (iii) the increase in headcount by 120 people (not
including increase in personnel headcount due to acquisition of
Zarplata.ru and Skillaz) from June 30, 2020 to June 30, 2021,
primarily in our development, sales and support teams; and (iv)
SPO-related and acquisitions-related bonuses in the second quarter
of 2021 not occurring in the second quarter of 2020.
Personnel expenses as a percentage of revenue
decreased from 35.2% in the second quarter of 2020 to 26.9% in the
second quarter of 2021 on the back of the increase in revenue.
Personnel expenses (excluding share-based
compensations and other items) as a percentage of revenue decreased
from 31.4% in the second quarter of 2020 to 23.1% in the second
quarter of 2021 on the back of the increase in revenue. See “Use of
Non-IFRS Financial Measures” elsewhere in this release for a
reconciliation of personnel expenses (excluding share-based
compensations and other items) from the nearest IFRS measure.
Our headcount has increased to 1,280 people as
of June 30, 2021 from 832 people as of December 31, 2020, mostly
due to addition Zarplata.ru and Skillaz personnel.
Marketing expenses
Marketing expenses increased by ₽124 million, or
53.0%, for the three months ended June 30, 2021 compared to the
three months ended June 30, 2020 primarily due to increase in
marketing expense in our “Russia (hh.ru)” segment across various
channels in line with our marketing strategy, as well as due to
addition of marketing expenses of Zarplata.ru.
Marketing expenses as a percentage of revenue
decreased from 15.3% in the second quarter 2020 to 9.2% in the
second quarter 2021, on the back of the increase in revenue.
Other general and administrative expenses
Total other general and administrative expenses
increased by ₽249 million, or 141.6%, primarily due to: (i) the
addition of Zarplata.ru and Skillaz other general and
administrative expenses; (ii) low base effect, including out cost
savings in the second quarter of 2020 not occurring in the second
quarter of 2021 and an increase in subcontractor costs in our
“Russia (hh.ru)” segment on the back of the increase in revenue
from other value-added services; and (iii) SPO-related costs in the
second quarter 2021 not occurring in the second quarter of
2020.
Total other general and administrative expenses
as a percentage of revenue have decreased to 10.9% in the second
quarter 2021 from 11.5% in the second quarter 2020, on the back of
the increase in revenue.
Total other general and administrative expenses
(excluding items unrelated to our core business activities) as a
percentage of revenue were 9.9% in the second quarter of 2021, flat
compared to 10.0% in the second quarter of 2020, as the increase in
revenue was offset by increase in expenses for the reasons
described above. 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 activities) from the nearest IFRS measure.
Net foreign exchange gain
Net foreign exchange gain was ₽9 million for the
three months ended June 30, 2021, compared to a ₽19 million
for the three months ended June 30, 2020.
Depreciation and amortization
Depreciation and amortization were
P289 million for the three months ended June 30, 2021,
compared to ₽184 million for the three months ended June 30, 2020.
The increase by 57.3% or ₽105 million mainly relates to
amortization of intangible assets of Zarplata.ru and Skillaz
measured at fair values on acquisition.
Finance income and costs
Finance income was ₽43 million for the three
months ended June 30, 2021 compared to ₽9 million for the three
months ended June 30, 2020, primarily due to an increase in
interest income on cash deposits.
Finance costs were ₽157 million for the three
months ended June 30, 2021, compared to ₽109 million for the three
months ended June 30, 2020. The increase of ₽49 million was
primarily due to ₽64 million interest accrued on non-convertible
bonds issued in the fourth quarter 2020 to finance Zarplata.ru
acquisition, partly offset by a decrease in interest accrued on the
bank loan due to a decrease in the key rate of the Central Bank of
Russia.
Income tax expense
Income tax expense increased to P414 million for
the three months ended June 30, 2021 from ₽75 million for the three
months ended June 30, 2020, following an increase in revenue
resulting in an increase in taxable income.
The effective tax rate was 24.5% for the three
months ended June 30, 2021, which is relatively flat compared to
23.9% for the three months ended June 30, 2020.
Net income, Adjusted EBITDA and Adjusted Net
Income
In the three months ended June 30, 2021 compared
to the three months ended June 30, 2020, our net income has
increased by 435.1% to ₽1,279 million, our Adjusted EBITDA has
increased by 239.9% to ₽2,264 million, and our Adjusted Net Income
has increased by 347.1% to ₽1,603 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 six months ended June 30, |
| |
2021 |
|
|
2020 |
|
|
Change |
|
| |
|
|
|
|
|
|
|
|
| Net cash generated from
operating activities |
3,574,071 |
|
|
1,046,862 |
|
|
2,527,208 |
|
| Net cash used in investing
activities |
(999,167 |
) |
|
(130,699 |
) |
|
(868,468 |
) |
| Net cash used in financing
activities |
(462,899 |
) |
|
(631,369 |
) |
|
168,470 |
|
| Net increase in cash
and cash equivalents |
2,112,005 |
|
|
284,794 |
|
|
1,827,210 |
|
| Cash and cash equivalents,
beginning of period |
3,367,610 |
|
|
2,089,215 |
|
|
1,278,395 |
|
| Effect of exchange rate
changes on cash |
(26,911 |
) |
|
51,913 |
|
|
(78,823 |
) |
| Cash and cash
equivalents, end of period |
5,452,704 |
|
|
2,425,922 |
|
|
3,026,782 |
|
Net cash generated from operating activities
For the six months ended June 30, 2021, net cash
generated from operating activities was ₽3,574 million, compared to
₽1,046 million generated for the six months ended June 30, 2020.
The change between the periods of ₽2,527 million was primarily
driven by: (i) an increase in net income (adjusted for non-cash
items and items not affecting cash flow from operating activities),
and (ii) an increase in contract liabilities due an increase in
advances received from customers.
Net cash used in investing activities
For the six months ended June 30, 2021, net cash
used in investing activities was ₽999 million compared to ₽131
million for the six months ended June 30, 2020. The change between
the periods of ₽868 million was mainly due to: (i) ₽556 million
(net of cash acquired) paid for acquisition of 40.01% stake in
Skillaz in the second quarter of 2021; (ii) ₽234 million deferred
consideration paid in the first quarter of 2021 for acquisition of
Zarplata.ru; (iii) ₽61 million paid in the second quarter of 2021
for acquisition of 25% in the charter capital of Dream Job LLC
(Russia); and (iv) issue of a loan to a third party in May 2021 in
the amount of ₽74 million on market conditions.
Net cash used in financing activities
For the six months ended June 30, 2021, net cash
used in financing activities was ₽463 million compared to ₽631
million for the six months ended June 30, 2020. The change between
the periods of ₽168 million was primarily due to the decrease in
bank and other loans repaid due to the change in our bank loan
amortization schedule in 2020, which was partly offset by the
increase of dividends paid to non-controlling interest by ₽40
million.
Capital Expenditures
Our additions to property and equipment and
intangible assets for the six months ended June 30, 2021 were ₽699
million compared to ₽143 million for the six months ended June 30,
2020, representing an increase of ₽556 million primarily due to
acquisition of intangible assets relating to Skillaz in the amount
of ₽552 million.
Dividend
In July 2021 we have settled the previously
announced dividend for the year ended December 31, 2020 of $0.55
per share representing approximately 75% of our Adjusted Net Income
for the year ended December 31, 2020.
2021 RSU Plan
On July 30, 2021, we established a new
HeadHunter Group PLC 2021 Restricted Stock Units Plan (the "2021
RSU Plan") to provide a more straight-forward, predictable, and
competitive long-term motivation model to our key talent. Prior to
this, our management incentive program has included the 2016 Unit
Option Plan (the “2016 Plan”), which is focused mostly on our top
management level, as well as the 2018 Unit Option Plan (the “2018
Plan”). There are no awards remaining for granting under the 2016
Plan and awards outstanding under the 2016 Plan have vesting dates
through May 2023. In connection with the establishment of the 2021
RSU Plan, our Board of Directors determined that certain awards
previously granted under the 2018 Plan shall be replaced with
awards under the 2021 RSU Plan.
Under the 2021 RSU Plan, the Company shall issue
restricted stock units (“RSUs”) carrying the right to receive
either ordinary shares or ADSs representing such ordinary shares.
The maximum number of shares provided under the 2021 RSU Plan is 6%
of the fully diluted aggregate number of ordinary shares issued and
outstanding from time to time. Awards under the 2021 RSU Plan are
expected to be granted in tranches during the 4-year period
expiring August 1, 2025. Each grant will be subject to approval by
our Board of Directors upon the recommendation of our management
and the Compensation Committee, based on certain selection
criteria. RSUs granted under the 2021 RSU Plan vest over 4-year
period commencing on the grant date, with the first vesting
occurring on the first anniversary of the grant date. The 2021 RSU
Plan will reward, among others, our key talent in development,
product, sales and marketing teams.
We plan to fund the 2021 RSU Plan through a
combination of a buy-back program, as was recently approved by our
shareholders, and new share issuance and allotment.
The establishment of the 2021 RSU Plan had no
impact on our financial results for the second quarter of 2021.
Financial Outlook
The following forward-looking statement reflects
our expectations as of August 16, 2021:
We currently expect our revenue to grow in the
range of 63% to 68% in year 2021 year-over-year compared to the
year 2020.
This outlook reflects our current view, based on the trends that
we see at this time, and may change considering market, economic
and social developments in jurisdictions in which we operate.
Second Quarter 2021 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, 2:00 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: |
5579793 |
Webcast:
https://edge.media-server.com/mmc/p/spm5gzm3
Contacts:
Investor InquiriesArman ArutyunianE-mail: a.arutyunian@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 issued by the
International Accounting Standards Board (“IASB”), we present the
following non-IFRS1 financial measures: Adjusted EBITDA, Adjusted
Net Income, Adjusted EBITDA Margin, Adjusted Net Income Margin,
Adjusted Operating Costs and Expenses (Exclusive of Depreciation
and Amortization), Net Working Capital, Net Debt and Net Debt to
Adjusted EBITDA Ratio. 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 from 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
costs; (3) depreciation and amortization; (4) expenses related
to equity-settled awards, including related social taxes; (5)
secondary public offering (“SPO”) related costs; (6) transaction
costs related to business combinations; (7) insurance expenses
related to IPO; (8) (income) from the depositary; (9) net foreign
exchange loss gain; (10) (Gain) on remeasurement of previously held
interest in equity-accounted investees; (11) net (gain)/loss on
financial assets measured at fair value through profit and loss;
(12) share of (profit)/loss of equity-accounted investees.
- “Adjusted Net
Income” as net income/(loss) plus: (1) ) expenses related to
equity-settled awards, including related social taxes; (2)
secondary public offering (“SPO”) related costs; (3) transaction
costs related to business combinations; (4) insurance expenses
related to IPO; (5) (income) from the depositary; (6) net foreign
exchange gain; (7) (gain) on remeasurement of previously held
interest in equity-accounted investees; (8) net (gain)/loss on
financial assets measured at fair value through profit and loss;
(9) share of (profit)/loss of equity-accounted investees; (10)
amortization of intangible assets recognized in business
combinations; (11) tax effect on adjustments.
- “Adjusted EBITDA
Margin” as Adjusted EBITDA divided by revenue.
- “Adjusted Net
Income Margin” as Adjusted Net Income divided by revenue.
- “Adjusted
Operating Costs and Expenses (Exclusive of Depreciation and
Amortization)” as operating costs and expenses (exclusive of
depreciation and amortization) plus: (1) expenses related to
equity-settled awards, including related social taxes; (2)
insurance expenses related to IPO; (3) transaction costs related to
business combinations; (4) secondary public offering (“SPO”)
related costs.
- “Net Working Capital” calculated as a
sum of: (1) Trade and other receivables and (2) Prepaid expenses
and other current assets; less a sum of: (1) Contract liabilities
(current); (2) Trade and other payables (current) and (3) Other
current liabilities.
- “Net Debt” calculated as a sum of
current and non-current part of Loans and borrowings minus Cash and
cash equivalents.
- “Net Debt to Adjusted EBITDA Ratio”
calculated by dividing Net Debt by Adjusted EBITDA.
Adjusted EBITDA, Adjusted Net Income, Adjusted
EBITDA Margin, Adjusted Net Income Margin and Adjusted Operating
Costs and Expenses (Exclusive of Depreciation and Amortization) are
used by our management to monitor the underlying performance of the
business and its operations. Adjusted EBITDA, Adjusted Net Income,
Adjusted EBITDA Margin, Adjusted Net Income Margin and Adjusted
Operating Costs and Expenses (Exclusive of Depreciation and
Amortization) 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, Adjusted Net Income Margin and Adjusted Operating Costs and
Expenses (Exclusive of Depreciation and Amortization) as reported
by us to Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA
Margin, Adjusted Net Income Margin and Adjusted Operating Costs and
Expenses (Exclusive of Depreciation and Amortization) as reported
by other companies. Adjusted EBITDA, Adjusted Net Income, Adjusted
EBITDA Margin, Adjusted Net Income Margin and Adjusted Operating
Costs and Expenses (Exclusive of Depreciation and Amortization) 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, Adjusted Net Income Margin and Adjusted Operating
Costs and Expenses (Exclusive of Depreciation and Amortization) 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,
Adjusted Net Income Margin and Adjusted Operating Costs and
Expenses (Exclusive of Depreciation and Amortization) 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, Adjusted Net Income Margin and
Adjusted Operating Costs and Expenses (Exclusive of Depreciation
and Amortization) 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, Adjusted Net Income
Margin and Adjusted Operating Costs and Expenses (Exclusive of
Depreciation and Amortization) do not reflect our cash expenditures
or future requirements for capital expenditures or contractual
commitments,
- Adjusted EBITDA, Adjusted Net
Income, Adjusted EBITDA Margin, Adjusted Net Income Margin and
Adjusted Operating Costs and Expenses (Exclusive of Depreciation
and Amortization) 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, Adjusted Net Income
Margin and Adjusted Operating Costs and Expenses (Exclusive of
Depreciation and Amortization) differently than we do, which limits
their usefulness as comparative measures.
The tables at the end of this release provide
detailed reconciliations of each non-IFRS financial measure we use
from the most directly comparable IFRS financial measure.
We provide earnings guidance on a non-IFRS basis
and do not provide earnings guidance on an IFRS basis. A
reconciliation of our Adjusted EBITDA Margin guidance to the most
directly comparable IFRS financial measure cannot be provided
without unreasonable efforts and is not provided herein because of
the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliations, including
depreciation and amortization, expenses related to equity-settled
awards and the other adjustments reflected in our reconciliation of
historical non-IFRS financial measures, the amounts of which, could
be material.
Adjusted Operating Costs and Expenses (Exclusive
of Depreciation and Amortization)
Adjusted Operating Costs and Expenses (Exclusive
of Depreciation and Amortization) is a financial measure not
defined under IFRS. We believe that Adjusted Operating Costs and
Expenses (Exclusive of Depreciation and Amortization) is a useful
metric to assess our operating activities. We excluded expenses
incurred in connection with potential financing and strategic
transactions, including IPO and SPO- related expenses that are not
indicative of our ongoing expenses. We also excluded equity-settled
awards as these are non-cash expenses and highly dependent on our
share price at the time of equity award grants. Therefore, we
believe that it is useful for investors and analysts to see
operating costs and expenses financial measures excluding the
impact of these charges in order to obtain a clearer picture of our
operating activity. Other companies in our industry may calculate
these measures differently than we do, limiting their usefulness as
comparative measures. See the tables at the end of this release
providing the calculation of Adjusted Operating Costs and Expenses
(Exclusive of Depreciation and Amortization).
Net Working Capital
Net Working Capital is a financial measure not
defined under IFRS. 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.
_____________________1 Denotes International
Financial Reporting Standards as issued by the International
Accounting Standards Board (“IASB”).
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, 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, 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 Condensed Consolidated Interim Statement of
Income and Comprehensive Income
(in thousands of RUB and USD, except per share
amounts)
| |
|
|
|
|
|
|
| |
For the three months ended June
30, |
|
For the six months ended June
30, |
| |
2021 |
|
|
2020 |
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
| |
RUB |
|
|
RUB |
|
|
USD |
|
|
RUB |
|
|
RUB |
|
|
USD |
|
| Revenue |
3,911,183 |
|
|
1,533,835 |
|
|
54,043 |
|
|
6,752,298 |
|
|
3,524,244 |
|
|
93,299 |
|
| Operating costs and expenses (exclusive of depreciation and
amortization) |
(1,837,860 |
) |
|
(951,065 |
) |
|
(25,395 |
) |
|
(3,406,509 |
) |
|
(2,089,684 |
) |
|
(47,069 |
) |
| Depreciation and amortization |
(289,316 |
) |
|
(183,904 |
) |
|
(3,998 |
) |
|
(527,289 |
) |
|
(368,310 |
) |
|
(7,286 |
) |
| Operating income |
1,784,007 |
|
|
398,866 |
|
|
24,650 |
|
|
2,818,500 |
|
|
1,066,250 |
|
|
38,944 |
|
| Finance income |
43,124 |
|
|
8,612 |
|
|
596 |
|
|
112,616 |
|
|
27,770 |
|
|
1,556 |
|
| Finance costs |
(157,227 |
) |
|
(108,664 |
) |
|
(2,172 |
) |
|
(307,958 |
) |
|
(227,497 |
) |
|
(4,255 |
) |
| Net foreign exchange gain |
8,688 |
|
|
19,455 |
|
|
120 |
|
|
8,466 |
|
|
94,768 |
|
|
117 |
|
| Other income |
14,974 |
|
|
10,907 |
|
|
207 |
|
|
28,051 |
|
|
20,596 |
|
|
388 |
|
| Share of loss of equity-accounted investees (net of income
tax) |
(781 |
) |
|
(15,202 |
) |
|
(11 |
) |
|
(5,645 |
) |
|
(24,746 |
) |
|
(78 |
) |
| Gain on remeasurement of previously held interest in equity
accounted investees |
– |
|
|
– |
|
|
– |
|
|
223,308 |
|
|
– |
|
|
3,086 |
|
| Profit before income tax |
1,692,785 |
|
|
313,974 |
|
|
23,390 |
|
|
2,877,338 |
|
|
957,141 |
|
|
39,757 |
|
| Income tax expense |
(414,188 |
) |
|
(75,030 |
) |
|
(5,723 |
) |
|
(668,395 |
) |
|
(306,459 |
) |
|
(9,236 |
) |
| Net income for the period |
1,278,597 |
|
|
238,944 |
|
|
17,667 |
|
|
2,208,943 |
|
|
650,682 |
|
|
30,522 |
|
| Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Owners of the
Company |
1,259,370 |
|
|
219,285 |
|
|
17,401 |
|
|
2,158,171 |
|
|
582,748 |
|
|
29,820 |
|
| Non-controlling
interest |
19,227 |
|
|
19,659 |
|
|
266 |
|
|
50,772 |
|
|
67,934 |
|
|
702 |
|
| Comprehensive (loss)/income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items that are or may be reclassified subsequently to profit or
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation differences |
(14,020 |
) |
|
(8,978 |
) |
|
(194 |
) |
|
(4,802 |
) |
|
16,540 |
|
|
(66 |
) |
| Total comprehensive income, net
of tax |
1,264,577 |
|
|
229,966 |
|
|
17,473 |
|
|
2,204,141 |
|
|
667,222 |
|
|
30,456 |
|
| Attributable to: |
|
|
|
|
|
|
| Owners of the
Company |
1,246,357 |
|
|
210,696 |
|
|
17,221 |
|
|
2,152,495 |
|
|
596,708 |
|
|
29,742 |
|
| Non-controlling
interest |
18,220 |
|
|
19,270 |
|
|
252 |
|
|
51,646 |
|
|
70,514 |
|
|
714 |
|
| Earnings per share |
|
|
|
|
|
|
| Basic (in RUB
per share) |
24.95 |
|
|
4.37 |
|
|
0.34 |
|
|
43.06 |
|
|
11.63 |
|
|
0.59 |
|
| Diluted (in RUB
per share) |
24.29 |
|
|
4.24 |
|
|
0.34 |
|
|
41.85 |
|
|
11.29 |
|
|
0.58 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Interim Statement of
Financial Position
As at
|
(in thousands of RUB and USD) |
June 30, 2021 |
|
|
December 31, 2020 |
|
|
June 30, 2021 |
|
| |
RUB |
|
|
RUB |
|
|
USD |
|
| Non-current
assets |
|
|
|
|
|
|
|
|
|
Goodwill |
10,658,178 |
|
|
9,875,224 |
|
|
147,269 |
|
|
Intangible
assets |
3,651,102 |
|
|
3,439,959 |
|
|
50,449 |
|
|
Property and
equipment |
466,363 |
|
|
466,725 |
|
|
6,444 |
|
|
Equity-accounted
investees |
60,519 |
|
|
129,666 |
|
|
836 |
|
|
Right-of-use
assets |
184,548 |
|
|
215,120 |
|
|
2,550 |
|
|
Deferred tax
assets |
232,616 |
|
|
176,328 |
|
|
3,214 |
|
|
Loans issued |
74,859 |
|
|
11,541 |
|
|
1,034 |
|
|
Other financial assets |
– |
|
|
25,491 |
|
|
– |
|
|
Other non-current
assets |
26,651 |
|
|
22,176 |
|
|
368 |
|
|
Total
non-current assets |
15,354,836 |
|
|
14,362,230 |
|
|
212,165 |
|
| Current
assets |
|
|
|
|
|
|
|
|
|
Trade and other
receivables |
134,482 |
|
|
69,120 |
|
|
1,858 |
|
|
Indemnification asset |
180,326 |
|
|
186,473 |
|
|
2,492 |
|
|
Prepaid expenses
and other current assets |
115,163 |
|
|
179,118 |
|
|
1,591 |
|
|
Loans issued
(current portion) |
3,003 |
|
|
8,178 |
|
|
41 |
|
|
Cash and cash equivalents |
5,452,704 |
|
|
3,367,610 |
|
|
75,342 |
|
|
Total
current assets |
5,885,678 |
|
|
3,810,499 |
|
|
81,325 |
|
|
Total
assets |
21,240,514 |
|
|
18,172,729 |
|
|
293,490 |
|
| Equity |
|
|
|
|
|
|
|
|
|
Share capital |
8,655 |
|
|
8,597 |
|
|
120 |
|
|
Share premium |
2,041,570 |
|
|
1,987,044 |
|
|
28,209 |
|
|
Foreign currency
translation reserve |
(97,816 |
) |
|
(92,140 |
) |
|
(1,352 |
) |
|
Retained
earnings |
1,519,316 |
|
|
1,536,137 |
|
|
20,993 |
|
|
Total equity attributable to
owners of the Company |
3,471,725 |
|
|
3,439,638 |
|
|
47,970 |
|
|
Non-controlling
interest |
112,607 |
|
|
69,104 |
|
|
1,556 |
|
|
Total
equity |
3,584,332 |
|
|
3,508,742 |
|
|
49,526 |
|
| Non-current
liabilities |
|
|
|
|
|
|
|
|
|
Loans and
borrowings |
7,564,116 |
|
|
7,791,326 |
|
|
104,517 |
|
|
Lease
liabilities |
127,975 |
|
|
164,245 |
|
|
1,768 |
|
|
Deferred tax
liabilities |
610,547 |
|
|
658,970 |
|
|
8,436 |
|
| Contract liabilities |
97,129 |
|
|
– |
|
|
1,342 |
|
|
Trade and other
payables |
116,628 |
|
|
178,607 |
|
|
1,612 |
|
| Provisions |
77,239 |
|
|
87,822 |
|
|
1,067 |
|
| Other non-current
liabilities |
120,425 |
|
|
142,531 |
|
|
1,664 |
|
|
Total
non-current liabilities |
8,714,059 |
|
|
9,023,501 |
|
|
120,406 |
|
| Current
liabilities |
|
|
|
|
|
|
|
|
|
Contract
liabilities |
3,368,044 |
|
|
2,785,402 |
|
|
46,538 |
|
|
Trade and other
payables |
1,671,891 |
|
|
1,273,089 |
|
|
23,101 |
|
|
Loans and
borrowings (current portion) |
480,830 |
|
|
485,100 |
|
|
6,644 |
|
|
Lease liabilities
(current portion) |
83,339 |
|
|
77,752 |
|
|
1,152 |
|
| Dividends payable |
2,018,033 |
|
|
– |
|
|
27,884 |
|
|
Income tax
payable |
532,749 |
|
|
401,733 |
|
|
7,361 |
|
| Provisions (current
portion) |
745,287 |
|
|
578,651 |
|
|
10,298 |
|
| Other current liabilities |
41,952 |
|
|
38,759 |
|
|
580 |
|
|
Total
current liabilities |
8,942,125 |
|
|
5,640,486 |
|
|
123,557 |
|
|
Total
liabilities |
17,656,184 |
|
|
14,663,987 |
|
|
243,963 |
|
|
Total
equity and liabilities |
21,240,516 |
|
|
18,172,729 |
|
|
293,490 |
|
| |
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Interim Statement of
Cash Flows
For the six months ended
|
(in thousands of RUB and USD) |
|
|
|
|
|
|
|
|
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
June 30, 2021 |
|
|
|
RUB |
|
|
RUB |
|
|
USD |
|
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net income for the period |
2,208,943 |
|
|
650,682 |
|
|
30,522 |
|
|
Adjusted for non-cash items and items not affecting cash flow
from operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
527,289 |
|
|
368,310 |
|
|
7,286 |
|
|
Net finance
costs |
195,342 |
|
|
199,727 |
|
|
2,699 |
|
|
Net foreign
exchange gain |
(8,466 |
) |
|
(94,768 |
) |
|
(117 |
) |
|
Gain on remeasurement of previously
held interest in equity accounted investees |
(223,308 |
) |
|
– |
|
|
(3,086 |
) |
|
Other non-cash
items |
496 |
|
|
(2,104 |
) |
|
7 |
|
|
Management
incentive agreement, including social taxes |
179,274 |
|
|
106,547 |
|
|
2,477 |
|
|
Share grant to the Board of
Directors |
10,761 |
|
|
10,757 |
|
|
149 |
|
|
Share of loss of equity-accounted
investees, net of income tax |
5,645 |
|
|
24,746 |
|
|
78 |
|
|
Income tax
expense |
668,395 |
|
|
306,459 |
|
|
9,236 |
|
|
Change in trade receivables and other operating assets |
(475 |
) |
|
31,707 |
|
|
(7 |
) |
|
Change in contract liabilities |
513,533 |
|
|
(14,405 |
) |
|
7,096 |
|
|
Change in trade and other payables |
444,479 |
|
|
(154,814 |
) |
|
6,142 |
|
|
Change in other liabilities |
(26,016 |
) |
|
(17,504 |
) |
|
(359 |
) |
|
Income tax paid |
(640,343 |
) |
|
(158,586 |
) |
|
(8,848 |
) |
|
Interest paid |
(281,478 |
) |
|
(209,892 |
) |
|
(3,889 |
) |
|
Net cash generated from operating activities |
3,574,071 |
|
|
1,046,862 |
|
|
49,385 |
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Acquisition of subsidiaries, net of cash acquired |
(790,044 |
) |
|
– |
|
|
(10,916 |
) |
|
Acquisition of equity-accounted investee |
(61,300 |
) |
|
– |
|
|
(847 |
) |
|
Acquisition of intangible assets |
(60,381 |
) |
|
(42,223 |
) |
|
(834 |
) |
|
Acquisition of property and equipment |
(90,909 |
) |
|
(103,946 |
) |
|
(1,256 |
) |
|
Loans issues |
(73,997 |
) |
|
(11,541 |
) |
|
(1,022 |
) |
|
Interest received |
77,464 |
|
|
27,011 |
|
|
1,070 |
|
|
Net cash used in investing activities |
(999,167 |
) |
|
(130,699 |
) |
|
(13,806 |
) |
|
FINANCING ACTIVITIES: |
|
|
|
|
Other loans received |
735 |
|
|
– |
|
|
10 |
|
|
Bank loans and other borrowings origination fees paid |
(43,615 |
) |
|
– |
|
|
(603 |
) |
|
Bank and other loans repaid |
(273,660 |
) |
|
(540,000 |
) |
|
(3,781 |
) |
|
Payment for lease liabilities |
(39,381 |
) |
|
(24,394 |
) |
|
(544 |
) |
|
Dividends paid to non-controlling interest |
(106,978 |
) |
|
(66,975 |
) |
|
(1,478 |
) |
|
Net cash used in financing activities |
(462,899 |
) |
|
(631,369 |
) |
|
(6,396 |
) |
|
Net (decrease)/increase in cash and cash
equivalents |
2,112,005 |
|
|
284,794 |
|
|
29,183 |
|
|
Cash and cash equivalents, beginning of period |
3,367,610 |
|
|
2,089,215 |
|
|
46,532 |
|
|
Effect of exchange rate changes on cash |
(26,911 |
) |
|
51,913 |
|
|
(372 |
) |
|
Cash and cash equivalents, end of period |
5,452,704 |
|
|
2,425,922 |
|
|
75,342 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of non-IFRS financial measures from the
nearest comparable IFRS measures
Reconciliation of EBITDA and Adjusted EBITDA from net income,
the most directly comparable IFRS Financial measure:
| (in thousands of RUB) |
For the three months ended June 30, |
|
For the six months ended June 30, |
|
|
2021 |
|
|
2020 |
|
2021 |
|
|
2020 |
|
| Net
income |
1,278,597 |
|
|
238,944 |
|
|
2,208,943 |
|
|
650,682 |
|
| Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
| Income tax expense |
414,188 |
|
|
75,030 |
|
|
668,395 |
|
|
306,459 |
|
| Net interest costs |
114,103 |
|
|
100,052 |
|
|
229,850 |
|
|
199,727 |
|
| Depreciation and
amortization |
289,316 |
|
|
183,904 |
|
|
527,289 |
|
|
368,310 |
|
| EBITDA |
2,096,204 |
|
|
597,930 |
|
|
3,634,477 |
|
|
1,525,178 |
|
| Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
| Equity-settled awards,
including related social taxes(1) |
90,135 |
|
|
57,973 |
|
|
155,241 |
|
|
110,033 |
|
| SPO-related costs(2) |
76,021 |
|
|
7,268 |
|
|
78,121 |
|
|
22,188 |
|
| Transaction costs related to
business combinations(3) |
23,090 |
|
|
156 |
|
|
24,644 |
|
|
11,275 |
|
| Insurance cover related to
IPO(4) |
– |
|
|
15,939 |
|
|
– |
|
|
54,772 |
|
| Income from depository(5) |
(13,555 |
) |
|
(8,978 |
) |
|
(26,016 |
) |
|
(17,504 |
) |
| Net foreign exchange gain
(6) |
(8,688 |
) |
|
(19,455 |
) |
|
(8,466 |
) |
|
(94,768 |
) |
| Gain on remeasurement of
previously held interest in equity accounted investees(7) |
– |
|
|
– |
|
|
(223,308 |
) |
|
– |
|
| Gain on financial asset
measured at fair value through profit or loss (8) |
– |
|
|
– |
|
|
(34,508 |
) |
|
– |
|
| Share of loss of
equity-accounted investees(9) |
781 |
|
|
15,202 |
|
|
5,645 |
|
|
24,746 |
|
| Adjusted
EBITDA |
2,263,988 |
|
|
666,035 |
|
|
3,605,830 |
|
|
1,635,920 |
|
(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) Reflects legal, accounting, and other
professional fees incurred in connection with our secondary public
offering that took place in June 2020 and July
2021.(3) Reflects transaction costs mostly related
to the acquisition of Zarplata.ru in December 2020 and Skillaz in
March 2021.(4) Subsequent to and in connection
with the IPO, in May 2019 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 renew
our D&O policy annually. Due to a decrease in IPO-related risks
over time, we believe that our D&O insurance expense from the
second 12-month period commenced May 9, 2020 mostly relates to our
ordinary course of business.(5) In connection with
our IPO, we have signed the Deposit Agreement, in accordance with
which we shall receive income from our depositary over the
five-year period from the date of the IPO, provided that we meet
certain covenants as specified in the Deposit Agreement. We believe
that this income does not relate to our ordinary course of
business.(6) Foreign exchange gains or losses do
not relate to our operating
activities.(7) Reflects gain on remeasurement of
the previously held interest in LLC “Skillaz” at fair value as at
the acquisition date as of March 31,
2021.(8) Represents change in fair value of the
call option to purchase an additional 40.01% ownership interest in
LLC Skillaz.(9) We believe that share of profit or
loss in equity-accounted investees is not indicative of our core
operating performance.
Reconciliation of Adjusted Net Income from net income, the most
directly comparable IFRS Financial measure:
| |
For the three months ended June 30, |
|
For the six months ended June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
| Net
income |
1,278,597 |
|
|
238,944 |
|
|
2,208,943 |
|
|
650,682 |
|
| Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
| Equity-settled awards,
including related social taxes(1) |
90,135 |
|
|
57,973 |
|
|
155,241 |
|
|
110,033 |
|
| SPO-related costs (2) |
76,021 |
|
|
7,268 |
|
|
78,121 |
|
|
22,188 |
|
| Transaction costs related to
business combinations(3) |
23,090 |
|
|
156 |
|
|
24,644 |
|
|
11,275 |
|
| Insurance cover related to IPO
(4) |
– |
|
|
15,939 |
|
|
– |
|
|
54,772 |
|
| Income from depository(5) |
(13,555 |
) |
|
(8,978 |
) |
|
(26,016 |
) |
|
(17,504 |
) |
| Net foreign exchange gain
(6) |
(8,688 |
) |
|
(19,455 |
) |
|
(8,466 |
) |
|
(94,768 |
) |
| Gain on remeasurement of
previously held interest in equity accounted investees(7) |
– |
|
|
– |
|
|
(223,308 |
) |
|
– |
|
| Loss/(gain) on financial asset
measured at fair value through profit or loss (8) |
– |
|
|
2,642 |
|
|
(34,508 |
) |
|
2,642 |
|
| Share of loss of
equity-accounted investees(9) |
781 |
|
|
15,202 |
|
|
5,645 |
|
|
24,746 |
|
| Amortization of intangible
assets recognized in business combinations(10) |
192,313 |
|
|
103,947 |
|
|
337,002 |
|
|
207,894 |
|
| Tax effect on
adjustments(11) |
(35,734 |
) |
|
(55,140 |
) |
|
(64,672 |
) |
|
(32,268 |
) |
| Adjusted Net
Income |
1,602,960 |
|
|
358,498 |
|
|
2,452,626 |
|
|
939,692 |
|
(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) Reflects legal,
accounting, and other professional fees incurred in connection with
our secondary public offering that took place in June 2020 and July
2021.(3) Reflects transaction costs mostly related to the
acquisition of Zarplata.ru in December 2020 and Skillaz in March
2021.(4) Subsequent to and in connection with the IPO, in May 2019
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 renew our D&O policy
annually. Due to a decrease in IPO-related risks over time, we
believe that our D&O insurance expense from the second 12-month
period commenced May 9, 2020 mostly relates to our ordinary course
of business.(5) In connection with our IPO, we have signed the
Deposit Agreement, in accordance with which we shall receive income
from our depositary over the five-year period from the date of the
IPO, provided that we meet certain covenants as specified in the
Deposit Agreement. We believe that this income does not relate to
our ordinary course of business.(6) Foreign exchange gains or
losses do not relate to our operating activities.(7) Reflects gain
on remeasurement of the previously held interest in LLC “Skillaz”
at fair value as at the acquisition date as of March 31, 2021.(8)
Represents change in fair value of the call option to purchase an
additional 40.01% ownership interest in LLC Skillaz and other
movements in fair values of financial assets measured at fair value
through profit and loss in 2020 that are not indicative of our
underlying business performance.(9) We believe that share of profit
or loss in equity-accounted investees is not indicative of our core
operating performance.(10) As a result of the acquisition of 100%
ownership interest in HeadHunter in 2016, acquisition of 100%
ownership interest in Zarplata in 2020 and acquisition of 65.02%
ownership interest of Skillaz in 2021 we recognized the following
intangible assets: (i) trademark and domain names in the amount of
₽2,010,242 thousand, (ii) non-contractual customer relationships in
the amount of ₽2,692,905 thousand, (iii) CV database in the amount
of ₽720,909 thousand, (iv) website software in the amount of
₽587,366, and (v) other software, licenses and other in the amount
of ₽3,550 thousand which have a useful life of 10 years, 2-10
years, 2-10 years, 3 years and 1 year, respectively.(11) Represents
income tax on taxable or deductible adjustments.
Reconciliation of Adjusted Operating Costs and
Expenses (Exclusive of Depreciation and Amortization) from
operating costs and expenses (exclusive of depreciation and
amortization), the most directly comparable IFRS financial
measure:
| |
For the three months ended June 30, 2021 |
|
(in thousands of RUB) |
Personnel expenses |
|
|
Marketing expenses |
|
|
Other G&A expenses |
|
|
Total |
|
| Operating costs and
expenses (exclusive of depreciation and amortization) |
(1,053,550 |
) |
|
(358,689 |
) |
|
(425,621 |
) |
|
(1,837,860 |
) |
| Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity-settled awards, including social tax(1) |
90,135 |
|
|
– |
|
|
– |
|
|
90,135 |
|
|
Transaction costs related to business combinations(3) |
23,090 |
|
|
– |
|
|
– |
|
|
23,090 |
|
|
SPO-related costs(4) |
38,138 |
|
|
– |
|
|
37,883 |
|
|
76,021 |
|
|
Adjusted Operating Costs and Expenses (Exclusive of
Depreciation and Amortization) |
(902,187 |
) |
|
(358,689 |
) |
|
(387,738 |
) |
|
(1,648,614 |
) |
|
|
For the three months ended June 30, 2020 |
|
(in thousands of RUB) |
Personnel expenses |
|
|
Marketing expenses |
|
|
Other G&A expenses |
|
|
Total |
|
| Operating costs and
expenses (exclusive of depreciation and amortization) |
(540,508 |
) |
|
(234,394 |
) |
|
(176,163 |
) |
|
(951,065 |
) |
| Add the effect of: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity-settled awards, including social tax(1) |
57,973 |
|
|
– |
|
|
– |
|
|
57,973 |
|
|
Insurance cover related to IPO(2) |
– |
|
|
– |
|
|
15,939 |
|
|
15,939 |
|
|
Transaction costs related to business combinations(3) |
– |
|
|
– |
|
|
156 |
|
|
156 |
|
|
SPO-related costs(4) |
– |
|
|
– |
|
|
7,268 |
|
|
7,268 |
|
|
Adjusted Operating Costs and Expenses (Exclusive of
Depreciation and Amortization) |
(482,535 |
) |
|
(234,394 |
) |
|
(152,800 |
) |
|
(869,729 |
) |
(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)
Subsequent to and in connection with the IPO, in May 2019 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 renew our D&O policy
annually. Due to a decrease in IPO-related risks over time, we
believe that our D&O insurance expense from the second 12-month
period commenced May 9, 2020 mostly relates to our ordinary course
of business.(3) Reflects transaction costs mostly related to the
acquisition of Zarplata.ru in December 2020 and Skillaz in March
2021.(4) Reflects legal, accounting, and other professional fees
incurred in connection with our secondary public offerings that
took place in July 2020 and June 2021.
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) |
As of June 30, 2021 |
|
|
As of December 31, 2020 |
|
| Trade and other receivables |
134,482 |
|
|
69,120 |
|
| Prepaid expenses and other
current assets |
115,163 |
|
|
179,118 |
|
| Contract liabilities |
(3,368,044 |
) |
|
(2,785,402 |
) |
| Trade and other payables |
(1,671,891 |
) |
|
(1,273,090 |
) |
| Other current liabilities |
(41,952 |
) |
|
(38,758 |
) |
| Net Working
Capital |
(4,832,242 |
) |
|
(3,849,012 |
) |
We believe that Net Debt and Net Debt to Adjusted EBITDA Ratio
are important measures that indicate our ability to repay
outstanding debt. Calculation of our Net Debt is presented in the
table below:
|
(in thousands of RUB) |
As of June 30, 2021 |
|
|
As of December 31, 2020 |
|
| Loans and borrowings |
7,564,116 |
|
|
7,791,326 |
|
| Loans and borrowings (current
portion) |
480,830 |
|
|
485,100 |
|
| Cash and cash equivalents |
(5,452,704 |
) |
|
(3,367,610 |
) |
| Net Debt |
2,592,242 |
|
|
4,908,816 |
|
We calculate our Net Debt to Adjusted EBITDA Ratio by dividing
Net Debt by Adjusted EBITDA:
|
(in thousands of RUB, except ratio) |
As of June 30, 2021 |
|
As of December 31, 2020 |
| Net Debt |
2,592,242 |
|
4,908,816 |
| Adjusted EBITDA |
6,073,624 |
|
4,103,715 |
| Net Debt to Adjusted EBITDA
Ratio |
0.4x |
|
1.2x |
Calculation of Adjusted EBITDA on the last twelve months basis
as of June 30, 2021:
| (in thousands of RUB) |
RUB |
|
Adjusted EBITDA for the year ended December 31,
2020(1) |
4,103,715 |
|
|
Less Adjusted EBITDA for the six months ended June 30, 2020(1) |
(1,635,920 |
) |
|
Add Adjusted EBITDA for the six months ended June 30, 2021 |
3,605,830 |
|
| Adjusted EBITDA on the
last twelve months basis as of June 30, 2021 |
6,073,625 |
|
(1) Beginning from the first quarter of 2021, we
modified the presentation of Adjusted EBITDA and Adjusted Net
Income, our non-IFRS measures, to exclude the impact of foreign
exchange gains and losses. Prior period amounts have been
reclassified to conform to this presentation. Please see
“Modification of the presentation of Adjusted EBITDA and Adjusted
Net Income” and “Use of Non-IFRS Financial Measures” elsewhere in
this release.
Reconciliation of EBITDA and Adjusted EBITDA for
the year ended December 31, 2020 from net income, the most directly
comparable IFRS Financial measure:
| (in thousands of RUB) |
For the year ended December 31, |
|
|
2020 |
|
| Net
income |
1,885,825 |
|
| Add the effect of: |
|
| Income tax expense |
685,772 |
|
| Net interest costs |
350,216 |
|
| Depreciation and
amortization |
750,558 |
|
| EBITDA |
3,672,371 |
|
| Add the effect of: |
|
| Equity-settled awards,
including related social taxes(1) |
249,286 |
|
| SPO-related costs(2) |
151,087 |
|
| Insurance cover related to
IPO(3) |
54,772 |
|
| Income from depository(4) |
(41,617 |
) |
| Net foreign exchange gain
(5) |
(83,030 |
) |
| Transaction costs related to
business combinations(6) |
51,665 |
|
| Share of loss of
equity-accounted investees(7) |
49,181 |
|
| Adjusted
EBITDA |
4,103,715 |
|
(1) Represents non-cash expenses related to
equity-settled awards issued in accordance with the Management
Incentive Agreement, and equity-settled share-based awards issued
to board members and related social taxes, which are payable as a
result of us becoming Russian tax resident in June 2019.(2)
Reflects legal, accounting, and other professional fees incurred in
connection with our secondary public offering that took place in
July 2020. (3) Subsequent to and in connection with the IPO, in May
2019 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 renew our D&O policy
annually. Due to a decrease in IPO-related risks over time, we
believe that our D&O insurance expense from the second 12-month
period commenced May 9, 2020 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) Foreign exchange gains or
losses do not relate to our operating activities. (6) Reflects
transaction costs related to the acquisition of Zarplata.ru in
December 2020.(7) We believe that share of profit or loss in
equity-accounted investees is not indicative of our core operating
performance.
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