Qiwi (QIWI) 30 Mar 212020 Q4 Earnings call transcript

Good day, everyone. And welcome to the Qiwi Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, today's conference is being recorded. would turn I to call time, Ms. this like the to over At Head of Investor Vlasova, of Tatiana Acting Relations Qiwi. Please go ahead.

Thank full I until morning, earnings Korzh, Pavel fourth Head call Services Financial Officer April Chief A replay at you, everyone. Access and Welcome Kim, are And this Chief for Executive Executive Relations. at listed to good Operator, with our the of me available of which Investor quarter investor.qiwi.com. Payment of replay will be website year available information Tatiana am Officer. Chief Tuesday, and call. Investor earnings XXXX. press XX, Vlasova, Acting is segment, Officer; Relations is our Boris Protopopov, the in release, and today Qiwi’s the Andrey today's

the recorded For was this replay, XX, March those XXXX. call listening on held to and

like of unknown forward-looking I forward-looking the statements. our the the everyone only, filed that factors actual most statements Before the uncertainties. subject XX-F Act Reform statements any would our and to forward-looking from Exchange no statements call. recent future are cause to expectations today performance of known events this Form and to Annual Qiwi they and are differ on with that All our and made Company's results our for current this contain future materially obligation Commission Private reflect refer are could forward-looking expectations Please not reflect undertake as we to these Report we to update Securities defined occur under statements statements to for about that XXXX. call guarantees Litigation may performance. cautions our risks remind begin, These Securities that after

Boris Reconciliations revenue, press today's that EBITDA, share. management call, certain release. net provide IFRS that, we'll Officer. net begin additional information included net Kim, measures, financial today's in call measures earnings our During by also turning such are profit certain adjusted profit Chief as to per total to adjusted and the Executive will constitute and adjusted information over non-IFRS With will

I'm Thank pleased you. for world. fourth of to Services Thanks cost everyone. demonstrated was you, year with for unprecedented robust solid results a us driven we by call. our Sovest I'm know this growth changes Payment full quarter year in XX% But despite PLUS and Tatiana, revenue and today of year and XXXX good profit projects above sale with the Factoring group Rocketbank. XXXX by on and even the measures was Total by optimization results year. and XXXX, including of Flocktory respectively. full XX%, and morning, share in segments, of glad we joining that, performance of implemented projects. amplified of the confirm or increased wind-down XXXX to the adjusted net the that guidance The the line development results we full net and that

more starting negative current imposed CBR Remittance have the restrictions At curve. and E-Commerce impact six to types Now on you in on of suspended operations. or to certain of QIWI Bank following these payments. CBR for moment, in Money QIWI scheduled The cross-border volumes continue restrictions the months Bank's These XXXX primarily limited imposed Russia Central our of our recent audit revenues, as December routine know, a and restrictions the Bank, period, XXXX. on restrictions December developments, from

Qiwi you our allow restrictions cross-border of to we some clients certain believe, allowed Wallet new and foreign working as used that a result were restart for closely favor maintain our negotiation imposed the to currently payments. will our cross-border these partnerships retain merchants. merchants, of operations in are with us with I We CBR, of that foreign

that However, these all will ease sure be restrictions. CBR we cannot

betting new be Sports able back betting In of of may through for significant bets discuss not lost, a the revenue become the serve some we lifts center landscape. be stream a December the continues betting or law we industry that in because changes we laws in of restrictions and XXXX, impacts will the unified two these one exclude gambling restrictions. restrictions, replace even do electronic restrictions not the on TSUPIS its end that probably behalf move Russia. interactive will of bet of establish these new of This details, Qiwi. we the including regulator was But And these December may the also regulations. the We ETSUP. of two TSUPIS. XXXX, to adopted. sport adoption permanent, CBR Currently in law ETSUP business more accept I'll and unified to By existing while gain the through companies CBR accounting

time, We industry, in we we Qiwi have have directly ultimate the volume sustainable revenue regulation, diversified continue become able We’ve payments decrease the serve the in are rising efficiency and loss cannot Qiwi fully to of retain projects. to innovations we payment cyberspace Wallet business many believe strive and complete which from changes. related customers across of number a all our our landscape, resilient part Nevertheless, continue not a increasing competition our We e-payments to changes see pursue sure businesses. the same changes of betting better opportunities serve services goal as the the a to model growth. or said, will block improving our however, of winning [ph], of may TSUPIS. related be been be scrutiny With counterparts that including the solid well the that we and foundation for the to cannot needs on as XXXX to will part focus will and betting to and of pay-offs. of to serve ETSUP, optimizing our operations our a our TSUPIS, be reflect proposal our and we industry growth will made bid cross-border capital. and to reinvent payments generated ecosystem should novel as changes for in presents we our and securing believe the betting We new At I industry for that to of landscape, as experience successful. If future income a of

on was net revenue increase to due Now, XXXX, was project RUBX.X billion. XXXX growth. some total by quarter decline led operation segment revenue partially revenue net of mainly The service financial the to payment which segments offset highlights. driven services was in July Last customer services by refill

XXXX, year, growth, walk revenue and a of the primarily the net increased net result due RUBXX reach performance XX% billion, For through RUBXX.X will results project services net services from segments, of program royalty of Rocketbank minute, from generated other revenue the wind-down. full year termination the a payment in our contribution prior as of by Andrey projects. total operating while revenue I'll billion our to in the discuss to up payment you segment the

industry, For operating Factoring the estate. previous full of clients XXXX, mainly pharmaceutical financing, processing medium offers more Factoring digital its net to clients two than and PLUS and RUBXXX and real industry core services, are year million of reached revenue in in types Factoring guarantees. doubled entrepreneurs, the bank and financing compared year. food sized small The PLUS RUBXXX million, digital factoring

the Flocktory we SME challenging on RUBXXX issued portfolio of more development PLUS new guarantees guarantees, consolidation Factoring projects XXX of revenue RUBX.X results. end have active of strengthening Factoring to already and the XX,XXX full aim amounted reached Factoring bank XXXX, demonstrated with with over level to PLUS contributed focus projects a using clients, than net billion. financing our project digital had Factoring portfolio bank macroeconomic the enhancing public RUBXX.X participation million. year The that PLUS in bank of primarily current is in portfolio also of billion Factoring XXXX. involved below building of net procurement, XXXX, performance position As services and of XXXX, will starting and to strong X.X the as which for %. bank XXXX, December Despite said, business, guarantees PLUS XXXX Tochka into be construction and environment Factoring clients of market. NPL In on of the and the fluctuates guarantees revenue guarantees transactions, primarily growth, from of clients digital end range new products, financial That the execution. operating total broad the

the services, a QIWI Tochka, due settlement Tochka revenue XX% by of RUBXXX number associate result a and declined generated equity Tochka our low year Bank, as For like million, JSC cash business active X, a net full served decline to well starting Tochka February to by as of XXXX. to transfer from XXXX, being of from in revenue clients as

successfully and optimization last the projects, Finally, loss-making completed and we Sovest two of divestiture year Rocketbank. process

a deems ratio net dividends The of XXXX. quarterly to will the of as it be profit glad I'm anticipated The the and as that announced audited of the pay-out adjusted final the least Board for performance XX%of on as distribute basis, results. dividend approved group right XX% confirm target of accordance at XXXX. considering dividends, adjusted Directors our of of our the target. of target full vary below so above that expectations of Moving accordance we necessary, profit in ratios decision and to record pay-out publication total payment year with net for dates about on, investments provided, be and for annual the the may Further, though provided with be Directors the distributing level group's may the the Board of in amount XXXX, the will our well the quarters Board, pay-out each reserves or in following our

guidance. Now onto our

in of place net decrease closely employees monitor net group revenue the this our ahead, total as and over XX% by XXXX. expected industry Payment the primarily decrease the XXXX, to to we run net a to long that, expect decrease to We adjusted the restrictions floor. Looking XX% market associated with over severe services is XX% conscious, as remains XX% on XXXX, significant our to remain ability XXXX. related cross-border as revenue to XX% by new while landscape. betting to our Having segment profit to situation ability recover secure currently we to over XX% by operation, effect in well uncertainty said

year on views currently our based severe our clear. becomes guidance Our of reserve more impact trends the If further, expectations course time, reflects call. the of rights extent impacting were scope only to of deteriorate as the of and the operations the current on the than the be current day business on revise results At our such to and and we the see the could outlook factors in and we expected. trends

the to Meeting. Annual and achieved position Together has model goals the to the Board group, the of played without regions, regarding from with is long our Andrey that development, the like resign business result continuity from I our comes date Executive the as reliance the as win our of the believe would a ecosystem the I would founder position on that will strategy. the and notified a to executive of key also able operation job. driven of this growth that our our Chief I is our the improved one XXXX well I [ph] CEO, its to other a into by I position. to my to also Qiwi. CEO in we Officer process internal Board recommended has at for that that combination team in revised of of Andrey thank mind, We long in Board function. Finally, General to initially product projects. team, Directors refined enhancement The like And for of And the intention have our undertaken particularly focused announce strategy of effect Andrey and business vital Qiwi the development happy ensure with a Directors takes succeed role Qiwi, after strategic recommendation that Protopopov we of and team. of team search our running share had among transform I'm of on Qiwi management profound candidates,

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here be Thank Boris, to you and everyone. pleasure today. you, good morning, my It's with

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result the in clearly discussion I and CBR we effect to segment. I emphasize in service that trillion we have Now our Payment far we contribution Service challenges to on a ecosystem team restrictions the our and restriction and cash over for payment entire and develop faced on of to our Despite and value payments, and operation. of our all of impact proved would payment their relevance continue have developed aim RUBX.X has of increased XXXX, with will a electronic volume processed like X%. begin to engagement. have the This and the the of by further. segments. The so our negative on our solutions resilience thank

payments CBR general net points. quarter Cross-border mentioned e-commerce continue therefore payment average As by declined remittance yield restrictions revenue revenue earlier, fourth yield, our commissions constrained. with be significantly e-commerce net basis verticals our money and higher have adjusted XX and Boris depressed market in to

Following to million. restrictions fourth million of quarter prior net X% fourth the payment year. in XXXX services of yield the RUBXXX RUBXXX revenue on revenue impact decreased between net of decline, the the by total those and e-commerce was believe compared the that quarter We

on move results. operating to let's Now,

focus increased we quarter XXXX, volume For e-commerce in network vertical, revenue revenue existing was result system, significant fourth of growth with the volume grew up entertainment growth segments personal restrictions. use RUBX.X compact increased continue quarter net of services XXXX, CBR driven to in RUBX a prior billion, growth the the namely quarter our remittance our billion cases and Services segment remittance net remittance to the was segment growth our increased compared taxi the XXXX, and which year. RUBX.X adjusted we our The money remittance reached the billion in was by payouts net the digital continued strategic The in and Payment significant the building vertical, stream, committed scaling to our money grew strong driven money fourth our quarter park mainly XX%. where the billion resulting from the limited growth growth fourth XX% as of in and The money and and driven over prior from self-employed remittance billion, by by vertical X% performance development fourth XX%, year, vertical of in RUBXXX largely market Service and primarily extending support by reached in policy Payment platform relationship in on to of our Payment our by the money by capacity increase of X% to self-employed respectively. XXX order companies of revenue space. self-employed, XX%, In other in RUBX.X improve by partners. future e-commerce by the Services stream. by which of

by e-commerce as primary for of yielding year-over-year of the such Services an Our of due inactive remittance XXXX. X.XX%, driven see by fee as RUBXXX net by as other in in net customization result as revenue market payment as in ongoing online the as loan we well verticals. was points as Payment mix, change basis and year, by to XX% due prior restriction, services, a acquiring. in sample product have as down decline money yield by RUBXXX a continue the compared growth levels to in several payments, average million increase adjusted increased year-over-year reduction we million, to implemented accounts to was one Such adjusted CBR of XX well revenue our

in the major a were pandemic, imposed restrictions affected events, from from globally. resulting negatively services taxies. our the financial using related adjusted numerous and returns balance due derived from in of decline core by [indiscernible] an drop marketing We the cancellation operation overall results to revenues COVID-XX Our primarily and sports

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you, Andrey. Thank

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was the net we growth, in an The of that year increase supported expenses, which our of by the decrease other significantly our For key optimization year. and and were the the revenue the measures, the profitability full through group. of full control implementing underpinned throughout year intensive successful investment cost operations margins, projects increased a XXXX, and efficiency overall we of divestiture have

on, of I the that both IFRS. refer discontinued operations the will to forward, under like Before continued we includes would going I effects to and highlight segment that numbers move

For December Adjusted in Sovest period the the same quarter as in previous to the the EBITDA discontinued XXXX, as compared fourth avoidance of year. and of said, RUBX.X RUBX.X XX%, are EBITDA being XX% adjusted billion year. Rocketbank our by the doubt, margin IFRS XX, for prior project for of in This XXX% increased operations financials. billion, presented from was with XXXX

billion, the mostly full decline in and due billion EBITDA advertising, EBITDA the divestiture acquisition increased XXXX the to prior XX% to other year. selling, prior net For mostly in due decrease with total the driven RUBX.X EBITDA lower administrative in to growth. administrative Adjusted related revenue Adjusted adjusted of from client expenses RUBXX.X in net was margin in XX% and XXX% margin compared expenses billion by and the the the general quarter fourth and fourth billion, year. of in expenses increased of the year, profit the to related XXXX, prior by the year XX% resulted from increased Sovest RUBX.X Rocketbank, by Group to adjusted traveling. quarter wind-down from RUBX.X

the quarter billion payment income to to by XXXX by prior from factors of While quarter an X% net loss full from RUBX.X profit expenses, group for growth largely services the driven tax net increase a offset primarily RUBXXX of year. the billion, Adjusted of expenses. fourth XX% fourth year adjusted the preceding expenses. from RUBXXX in personnel profit share billion, category XX% quarter growth, Services impacting based decreased million for the resulted increased net revenue excluding profits in the the other payments to the net adjusted effects by same fourth million, by and growth offset Corporate net EBITDA, in by segment RBUXX.X segment XXXX, the for RUBX.X year. Payment increased

as million driven decreased net RUBX,XXX the million, year. primarily While corporate XX% equity prior by to from XXX% growth Tochka net the to net up, performance. previous due a of in RUBXXX by strong million, project year and net the RUBXX to million Factoring a of was growth the compared to PLUS pick higher category profit loss million full profit in result RUBXXX of XXXX RUBXXX and other loss year, by

and the performance please continue financial We that, growth. order optimize sustainable the questions. ensure in up call improve operator, to for group open and our operating operations of With to

you. Thank

[Operator session. your Please will now Bespalov We VTB first comes question of questions. the from of line conducting Instructions] be Our a question-and-answer with Vladimir proceed Capital.

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wallet well businesses, is other self-employed. of portion peer self-employed affected payouts big money to CBR doing and and by as between to companies regulation, that related the the taxi companies payouts remittances to Second not payments both peer to the the

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Our come of Thank from Sukhanova you. of the [Operator BCS. Instructions] your with line next questions Maria proceed questions. Please

Yes. afternoon. questions. I have two Good

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apologies. yes Yes,

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questions [Operator Thank your questions. Andre proceed Capital. from Instructions] Silva of with [ph] Our come Please you. of line next Metaloff the

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