Qiwi (QIWI) 20 May 212021 Q1 Earnings call transcript

Good day, everyone and welcome to the Qiwi First Quarter 2021 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Ms. Tatiana Vlasova, Acting Head of Investor Relations of Qiwi. Please go ahead.

good and operator, you, morning, everyone. Thank the to Qiwi’s first call. earnings quarter Welcome Officer; Executive am of segment, Boris today Executive Head Vlasova, and Kim, Protopopov, Relations Chief I Chief Acting me Elena Investor Nikonova, Tatiana Financial Payment of Officer the and Interim with our Andrey Services Chief Officer. are this call of until replay be available Thursday, Xrd A will of June, XXXX. on investor.Qiwi.com. replay is press is available earnings listed release, at website today's the our in for Relations information Access Investor which

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

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

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

strengthen I attention and Payment as and I’m the I’m CBR the this quarter you, Tatiana by Flocktory today joining which namely products, greater Taking XXXX, have Qiwi restrictions confirm review. XXXX our in into diversification we and of EBITDA to in results our our XX% Notwithstanding our reach securing that XXXX well profit digital morning growth share will resulted business, Group. affect this and of QIWI call. and primary secure long-term This quarter increased our announce will the optimization committed everyone. our strategic goal good implemented Group. growth This the adjusted development PLUS first of for account, would of Services we to cost respectively. to areas imposed and XX% Services in to of the of year, measures future, in first particular adversely future investing pleased primarily our that would affected in as remain the self-employed on Thanks development Payment to us our Factoring ecosystem entertainment. our continue growth to and business, glad Thank like December our to the from and which adjusted by products net continue devote to XXXX

the while decrease onto Payment other our Services Financial you Sovest discuss the highlights, by driven operating our net billion. from the in some RUBX.X through of was XXXX. Payment decrease segment segment performance by XXXX revenue quarter walk sale operating Services revenue I of segment project underpinned of Consumer revenue will results July Andrey minute, will the in a The projects. was Now, resulting first decline net net total Services mainly

prior corresponding period of of year. quarter net XXXX, revenue in the RUBXXX reached and almost For to Factoring RUBXXX million PLUS doubled million compared the first [ph] the

RUBXX.X the Digital Factoring we profile the portfolio XXXX, billion bank a at over of using than total has end Factoring active monitor finance with Factoring end of had billion. portfolio March that reached risk note XXXX. XXX the That to growing more important March the digital of RUBX.X of guarantees. closely As PLUS guarantees of clients portfolio bank

As the strengthen the of of size will the XXXX, the Factoring is that enhancing by In PLUS quarter the of slightly products why first quarter marked portfolios level demand of allow seasonality. year. X.X%. such position portfolio like both and SME new the for below of general, clients characterized would to to was XXXX. the current on Factoring In highlight clients second quarter have Bank the NPL Services, I penetration the on us This to new for higher half going to compared our loans decreased increase market. In explained new Performance in first the products. XXXX, SME service of focus clients attract market business will of some aims we development first have and and XXXX, already the in our this end significantly of both forward. the lines, of which are Guarantee launched for services which

first first of the in stream In the performed highlight and period compared to net the same increased Flocktory net year. revenue well quarter quarter launched the quarter quarter with by would of period like active the to decline by has martech the XX% settlement Tochka the broadened XXXX, have result being served Bank. that RUBXX a net first Flocktory compared revenue clients Qiwi to new year. I of quite Meanwhile, increased of prior of prior [ph] XXXX number cash of revenue products. awesome by model in same personalization which the new declined due a XXXX, services In mass itself in XX generated mailing the the the from was million, first For Tochka Tochka to attracted to XX% RUBXXX of XXXX, by million as of clients lower profit and XX%

per the the XX% payout distribute of as dividend quarterly XXXX of for We annual glad by accordance profit to it the XXXX dividend approved of the is that so $X.XX share. at February Board provided. Moving committed of deems have in the determination first least approved necessary of XXXX. quarter to total dividends our the Board Board The financial the I’m payout adjusted right following that Directors in ratio the with the on, Directors announce results, reserves net remain of target a target to

However, the or payout ratios for each be provided above quarters below of the vary may and target. may

betting a and I Now, you restrictions give like in would the market. to CBR current situation upcoming the update with brief the the changes on

revenues, CBR a in effect of current and the Qiwi have you in December continue to six be fact restrictions know, Bank’s our Qiwi XXXX, Bank certain volumes on December In primarily period the these negative and the imposed forward. all for cannot verticals. and a spite As in At on we XXXX, a process of be restrictions CBR from Central scheduled the ease that these routine starting imposed restrictions Bank, of months sure the going e-commerce operations. will Russia the market CBR audit impact following restrictions moment, that

also restrictions. that some bill the these do through back CBR adoption the restrictions, if the the because We the Russian fact in not new the that the could I’ll of important may we legislature, these will while would industry landscape. may more to impact regulations. also probably Andrey of prohibit types the of income recently lost supported including permanent, that new exclude the these become changes CBR restrictions to It’s here be business submitted by the be not of some to or cross-border detail, move draft lifts in operations. The notice of that laws in discuss even gain to restrictions we betting poor able

a proposal made or end Interactive XXXX. serve announced, Bets As started to a September Unified in the have previously ETSUP Accounting which we Center as operation of

the moment, yet. our the be successors successful. be At cannot bid current announced haven’t However, will we sure that been

our and able and payouts. Wallet our -- generated time, betting we to for a future Moreover, monitor the do suppose have proved and to diversify situation are income to environment, it will our closely are results. will will this. model revenue change as an payment in updates part At or that that We cards be ecosystem. loss our top-ups our cannot Qiwi resilient impact from strive always business including could notify believe foundation adaptive believe profound needs in may landscape, for related to fully changes growth. a we our volumes and innovations same of future a a industry we any become ETSUP. expertise on all we retain and will enabled the of I in to related We services for will enhance the directly the to ecosystem highly we demand If and part operating environment a this you customers and be betting reflect before of we regardless to industry our times we should even that solid consumer which serve of and have complete decrease better not oriented is continue strongly the our winning new regarding QIWI’s experience of [Indiscernible] significant many serve our which we the

for Services of across improving Andrey on our the we expand this, optimizing focus on the will ultimate for turn business. the securing continue I efficiency we With further our will of pursue We will and and to growth of opportunities This cadence our update all to product many company. over We Andrey? operations of ahead Payment see areas goal projects. proposition sustainable expertise. said, call an being

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

Payment to in trends increased XXXX, the first the which our billion restrictions areas, volume our by affect In of Payment our over X%. payment on quarter business, move focus are and self-employed which money results. electronic positive key Despite including remittances, supported segment. currently just Service we Payment we processed payments our Let’s and RUBXXX and in Service our cash results of

CBR Let operations. with have negative continue persist the restrictions now impact our restrictions. on and update on a me Currently a you provide to brief

continue As Boris and verticals money under e-commerce earlier, remittance market to our mentioned be constraints.

we adjusted first transactions with restrictions XX Therefore, quarter basis As general cross-border by net stated, CBR of depressed XXXX. net yield e-commerce revenue yields, Payment commissions. in average revenue higher have declined our in significantly the points the previously the

the of to by Following XX% e-commerce the decreased net huge compared quarter revenue prior the decline, first year.

results. on to the move let’s operating Now,

RUBX.X which our to remittance At streams, by key development the of platform the increased net growth the restrictions. other partner working by vertical industries. which volume revenue in the the new RUBX.X net our XX% the partners. RUBX.X segment net Service and of first due X% by segment revenue. was was taxi the billion, prior verticals compared Service scrap decreased and quarter contrast, time, The down over and development first as the remittance by where a connected of to XX% remittance the decline in In significant resulting grew by the of Service in billion which XX%. focused decline quarter self-employed billion, in Payment remittance revenue growth net was In decreased winning largely growth and same year. XX% driven payment our market six currently RUBX.X our strategic driven our from driven quarter relations the e-commerce significant metal primarily money reach XXX building to vertical to verticals, XX%. XXXX, of and money CBR of the market namely of to with significant of in of system the strength. XXXX, we self-employed the decreased growth the and in existing RUBXXX prior money money partners of Payment Payment see remittance revenue extending Payment performance up of by payouts verticals volume net on The the the payments companies, companies, and billion strong we our represent XXXX growth grew by For XX by e-commerce our by to amounting our result payout continue to in volume self-employed we with in in offset to market billion from increase of by revenue mainly year, the XX% money first contact our network

future our this with working the and the businesses strengthening our address assistance to for of position by entrepreneurs by their growth which services self-employed of improve ensure in [ph] self-employed needs creating for market. stream continue clinicians We the and

us markets diversify which services We penetrate expand and constantly also products in very help payment more our seeking with services proposition new solutions position provide believe convenient BXBXC areas new growth. product demand are our and business. and that and clients, to diversified relevant cementing and market our our will for We

restriction, also X.XX%, driven before. was vertical. Services Service other decreased the in million CBR by to by a terminals. on driven digitalization share cash points payment RUBXXX and money accounts The primarily Payment for yield to growth the average year-over-year XX I’ve this of yield. in revenue of year revenue our adjusted the explained negative net yield net revenue revenue to payments. as of The a compared we market pandemic X% result kiosks net of RUBXXX reduction by our have on decline net the as in the down average e-commerce million accelerated unclaimed remittance payment basis Our as see the Payment process by Such fees and payments was impact has of and prior in decline impact inactive network

to network the underserved growth business and and will see developing niches and digital offline our the online for to convenient continue QIWI. financial of account, more part a best-in-class terminals. more in and our obvious will terminals to are are of digital gain and for to pass trend over solutions. our are With long increasing term Group. that and components currently and overall sure and positioned Taking kiosks lack provide to clients key Nevertheless, digitalization further Elena? Payment the case that Offline we which new cash use we of that aim payment kiosks important our the diverse to efforts are scrutiny and of on cyberspace. believe are towards make our transfer our has strengthening for of details well With ecosystem opportunities performance we share course, of from important capability adjusting I Moreover, do larger presence solutions. and regulators However, to payments, Elena this, into on infrastructure. competitive. market market enter It’s, the Service the we maintain the mid of payments we from the the a ecosystem the become with

and you, good everyone. Andrey morning Thank

billion Payment first year. increased amounted adjusted the same from the billion factors XXXX tax general EBITDA impacting RUBX.X for from profit of the offset profit net the increased net net first resulted Adjusted on compared by RUBX.X the gain RUBX.X year. margin to same same exchange to billion in to Adjusted primarily largely adjusted RUBXX being thanks and to first quarter foreign in the XX% in the and the net successfully and XXXX, administrative of This mostly compared decreased growth selling, of and an in see of growth quarter net a first margins. XXXX, to from due for cost segment by overall billion, of expenses Despite by quarter expenses expenses, underpinned RUBX.X implemented prior personnel of to net XX% to increase XX% decrease the million the decrease, EBITDA resulted effect quarter the million the for year. divestiture in in acquisition margin exchange quarter profit the EBITDA, in we of XX% the of to increase efficiency expenses. for the revenue to XXXX Group. the quarter by period billion said, income adjusted significantly decrease in the million total expenses, driven in have from Moving revenue million the of Group of in Rocketbank Sovest the quarter by lower adjusted of net increased first the net other RUBXX in and XX% RUBX.X by expenses. wind-down of in the Services measures for previous Services margin driven adjusted the was the client the the the from increased prior prior in share-based administrative payment primarily optimization to segment year. increase Payment first Corporate Adjusted an EBITDA other first and advertising, RUBXXX RUBXXX period by profit decline related of and expenses. to due loss we our operations excluding our prior profit year, loss XXXX we foreign

mentioned earlier, of by net result growth and grew as Boris XX% by primarily profit the performance. the project to a Tochka higher driven equity As million, pick-up RUBXXX strong

to performance to operations sustainable financial and optimize We continue of our in group operations improve and ensure order the growth.

loan Now, all, in effect uncertainty onto our I well conscious ability replace in at primarily remind monitor as currently our there industry operations place the the remains still related the remain market first of the would landscape. to to recover moment restrictions the CBR significant the to cross-border guidance, betting like of will everyone that how grant a or new XXXX to secure evolves. as closely in ability situation our restricted and We and

and our be this and date as deteriorate guidance If in current than reiterate the our Having see we reflects the more trends based business tough trends outlook of expectations Our impact to and on respect is of views only such earning that, on expected. XXXX currently we could our further, were operations of outlook. call. said the

guidance XX% We for reserve please Service of decrease results that of net results to With our decrease and our expect course adjusted surpassed net factors to expectations, remain XX% by over XXXX. XXXX. the over the revise to XX% while to impacting scope the year the first Despite the is by quarter call the right operator, questions. extent we open up clearer. the the become cautious in and when the expected that, decrease revenue profit Payment total net revenue the to fact to XX% XX% by XXXX over XX% segment to

be Thank question-and-answer Thank you. [Operator this At Instructions] you. a conducting session. time, we'll

Please of William Kennedy with comes Chris question. with Blair. your question first Our proceed the line from

update the is restrictions? of question. some headwinds give us the the that taking an CBR you for mitigate some efforts you Can of the on doing to thank Hello, from Qiwi

Chris, you thank questions. Hello for your

reports the hand, on as for important one some CBR. clarification, that get we we notion are compact in we of the as big almost At well, that we and we restrictions second with And dealing them. of This the us. out are restriction of helping others before, we Steam, are like good the time, includes the some with us we and to sending the and As and with are said before, AliExpress, the we type continuing CBR some have. working name said example, notions are that's -- how and regular we CBR in -- they're same Google in the weekly contact, level for famous

So, we will as with -- believe restrictions chance our that a after are up And six that fully be line we is months. why will expectations. currently, said, have there lifted we that's -- in good we

Yes, restrictions and Boris legislation could the because add some CBR just -- bill But Russia. of cannot mind here. should I we the guarantee completely. lift that cross-border we the would Minister but a is will impossible. quick of And all restriction of to in keep also that And which permanent, payments submitted of the Finance, the times some make become of recently, parliament, in course, changing

that's discussing that in mind should point So, you keep another point.

the Okay, then I just, helpful. And clarification. that's guess,

that think it? even run should if Is So, about the to lifted. be current rate are sustainable, the way restrictions

will notions how to the It yes. we're will working how will to be portion will the take and of of of need we get when get revenue to some we'll able But it will back. course be we be and partners and believe -- working world's time lifted, Generally, with. we'll even big -- fast see we back restriction

same for or we the that several So, let's this have it's say quarters currently. less or growth months, rate currently more

guys. lot, a Thanks Great.

Thank you.

of next your & proceed comes with from with Davletshin Co. Wood Ildar Our the question line question Please

you. thank Well,

the kind pretty So, a bet around provided of and repeated standard I clear just on you want range yet to you range the guidance which uncertainty, -- earlier. gave you the

XX% that the assume seems big could that So, a right better case, may is happen September. two end the maybe then in or that of -- uncertainties, in portion And are we revenue range decline so -- you case will about understand like the worst help at or provide. wider. about also current the in there case, coming particularly thinking it the [Indiscernible] change it are regulation be betting we us to which XX% talking in of unknowns And revenue

that for all range risks you the its your of is Ildar, the current say for reflecting the again. thank question, potentials and Andrey guidance let's We the year. believe

like any the So, to that's and why keep revenues whatever able in high. about of be our for will be. Talking to that that key be it remind we and business to wallets the quite different quarter the first that this we is would range believe case, possibilities, fourth all, will effect will limited I

be the year, significant this for why let's for not year. that's yet it that So, it's important next say as will

versus second you. wallet [Indiscernible]? in we've quarter. What the activity Thank or sharp quite slowdown and the trajectory recently, And seen is same seen my decline previous trend any like continued a in maybe in with the quarter you question the [Indiscernible], have first is more

Yes.

quite key team as the well. the one hand, small online ones detailed online in trends the as make our do and of say of important, For some quite and well key we on checks you CBR usage wallets overall the small the now, in the bets notions top that changes time. with example, in number we that the -- consumers the work on for same the current operate affecting like a observed behind keyword how the international some quarter at we initiative like with healthy terms And before teams sport procedures and ways have it of of affected. is games toolkit was in active and the course, high the volume games, this on because KYC first we are would restrictions in of -- for of our in for the let's time, revenue are growth rollers more within there similar self-employed I say are there same lot this numbers so, where to At notions course,

of moment. our of business wallets declining, overall not is while is capable were is would that seem the So, healthy quite for number

Thank you guys.

you. Thank

comes BCS Our with Markets. of Please line Maria proceed Global the next from question. your question Sukhanova with

Good have first sources about for [Indiscernible] in several afternoon. quarter. I questions growth of the the

breaking expect fine first the could considering some felt driven whether the base So, of please makes segment was it check and [Indiscernible] because of, that probably that quarter to you was sense low. by the

just too? So, which a it helpful. That you a from big for taxi want could to -- bit exactly you. something whether seeing segment like reach else? driver about and check And products be which coming are second you was more where talk self-employed will it maybe is industries nice instance, or Thank performance,

Yes, one Yes, the you volumes is for the the included and I would [Indiscernible] and driver say, the Maria, you're into yields the question. in thank vertical growth this big, are both for right, category. of your for

has continue I Second grown to we fast out using us, that growing both talking rewards will payments quite which entrepreneurs grow. category the and accept the and products taxi peer-to-peer developed self-employed, with checkout for as and say the about different self-employed and secondly, that businesses of well. types say other peer-to-peer all are biggest will a nicely to via putting are quite I self-employed online, are with businesses, key payments And

Thank you.

Thank you.

your proceed line comes question. question next of Please with Andrey from Sova with Our Mikhailov Capital.

call. I the much very you for three questions. have Thank

question. current The on allowed volumes? active stream how revenue that That's first the impact you main regulation your much the this by first it is and one new could mentioned,

becoming regulated betting company the maximum selected actually and on And on any The statement written of all the segment. third there be against updates you industry regulation. things your you provider the [Indiscernible] changes you. written on various could maybe that question haven't changes that. one Could -- I outcomes you payment payment this is the betting to? on statement, buy on for those, amount could second claims Thank this the probabilities the and And States. on if provide subject is industry in are you question the the of especially services parts in

we partly these for cross-border -- I and payments to question, placed, types off first of will answer change when these will legislation already Okay, if this all all the us nothing because new switched payments. be

For And switch at central these moment couldn't restriction by us payments could regulation, new we performed. when it just that. want the and But we bank are evidence we on they just imposed then. that to another adopt under this do it's be

revenue, For volume will nothing us in and change. terms of

At regulation second in so this regarding be whether on assure find profound, new it's two-piece. The our to moment, appointed the and that we'll anyway. a expertise hard in not. place two-piece, we'll that the our regulation is question But field so as unified wide landscape say we the probably new

acquire bookmakers. at to As Andrey never to which it's least for wallet, industry at is revenue as any game for TV very probably And the mentioned, premature payments we for but from keep in statements we and make a could comes utilities, could moment. the volume popular and very vehicle be able be served

question? the you third could Andrey, repeat

the so Yes, against the the as on to action class in the third suites. is claims state, company question the

changes. as waiting we for the We're of this now, a And-- do Andrey, plaintiff. any Elena. is it still in lead same as stage It's Actually, Hello still have April. on was appointing not

this these I known? it amount the or of guess query maximum is coins,

known it's yet. not No, no,

you. Thank

you. of Instructions] next question Thank with [Operator Vladmir comes Capital. your Our with line question. from Bespalov Please VTB proceed

a the quarters. remittance thank have my good taking and will questions. of be of we seen very My kind first growth you follow-up for Hello, on several acceleration the a on consecutive congratulations question vertical; for number money

of the are the to you competition? using growing you clients would what momentum? for of kind Would XXXX, year which that at given maintain about your expect? look we those if full be this And able these you growth So, services feel how today, secure

we question. from come money related the to already and industry suites your revenues there part as the changes for our in including that and breaking mentioned, you rules said, are getting are remittance said, I it's of may and -- still because strong affect will with thank this share uncertainties banking I that Vladmir, in some volumes still there Yes, of the we competition, of the the are elements are reflected talking still question, regulation we we stronger about would niches as for revenue I say And right, our have feel well. we we in this -- -- band. quite getting would year, that playing it's this and entering as -- uncertainties say a

right? much. thinking your when implied first worst around some during like mentioned bound guidance, at guidance betting, bounds But let's say if I better will scenario implies again, was than communicated much the lower number, you your Thank is the worst be you you the looks I very upper the increase to calls, talking this the guidance, betting, lose, like ago, implied, first when related scope any of developing like what several lines? about I'm while among even to guidance, previous positive the years that going for situations the quarter And betting the developments the case scenario that doing remember case you're looked you're it

to strong said, next I Yes, developed like of too currently guidance; need quarter. the the growth. will in that's the and it's see next we time, with organic and will the how quite developed -- so regulation be competition to as same true. early the performance translate we At believe the We betting we behind, stupid the situation we will kind discussing think it see will be after be

a concerned that I about going Are you. take much? to change you. served. Thank that? you are understood choosing one as any And bank Qiwi is matter question it to all a doesn't as more to which are situation And Thank the There the you or clients; steps Tochka. far on be as decrease

part most would the revenue say If because equity Tochka, here related operators of referring it's is our we important teams using some the the with within Tochka, you are legal to are I changes to associate. technical

the are getting one believe of part is we I our and income this growing. So,

this is why that's So, really not revenue change important.

you thank Okay, much. very

and you. gentlemen, thank Thank question-and-answer for Ladies you call this our and concludes thus session concludes today. your participation. our We

disconnect now may You your lines.