HeadHunter (HHR) 18 Mar 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to today's Fourth Quarter 2020 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be the question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today on the 18th of March 2021. I would now like to hand the conference over to your first speaker today, Roman Safiyulin. sir. ahead, go Please

everyone, year to XXXX Hello, quarter Group and full earnings and you. HeadHunter welcome fourth Thank call.

obtained and our On Mikhail the release a XXXX investor.hh.ru. Financial containing Moiseev, full quarter A today, and results Zhukov, have at our be Officer; Chief year our Chief our copy Strategy call Executive through Officer; press today, Officer. website Dmitry Sergienkov, we was our and earlier Chief fourth Grigorii may issued

through the the made contain such revise or you obligation harbor or I statements. results expectations will walk Now, statements. forward-looking today these will by discussion safe forward-looking our no to to may as Today's briefly publicly statements implied only And statements. differ results of update Actual speak undertake statements. today. materially from predicted We

the discussion annual was a to results section please XX, For factors risk filed some on Commission prospectus offering XXXX, the U.S. and on in report with cause with Form Exchange ended in of XXXX. that our Risk June that Securities connection actual could for public and our see year Factors our December final the the XX, differ, of XX-F

we will to During this financial measures. referring call, non-IFRS some be

release is measures of investor.hh.ru. not issued most each financial earnings financial our measures provided today in directly is presentation, IFRS. accordance to on and slide which comparable with we reconciliation IFRS website Additional are the in the of prepared the A the non-IFRS available IFRS at measures

make Please ahead. the turn quick Mikhail call opening I'll over remarks. to Now, to go

a businesses up doubt, lives, has XXth good there Last adversely before. COVID-XX everybody's anniversary. a pandemic without the new celebrated year impacting and HeadHunter that everyone. its afternoon, Roman, some others. to opening you, like Thank has opportunities and not been changed And year,

reinforced the on vacancy platform milestone, and us postings. backdrop during key new than significantly further stronger consolidate Despite challenges, operating in platform, of into market XX accelerated metrics. and timely of network acquisition powerful partners reached effect product strategic job XXXX, this only our areas seats been. market XXX,XXX the our not defended of we and to holding emerged of our steps the recovery consumption introduction but CVs a business ever allowed of above The In by position, February suite. from platform the marketing of leading through certain strong our Our even a development level monetization improve on job number also Zarplata.ru, record all key have and the regional million

is confidence these slowly which will getting XXXX Russia, The to back businesses HeadHunter. really forcing for of factors, digitalization, channels for Now, that life us accelerated to alongside recruitment. to is All gives effective believe we makes the more a exciting in competition normal, leverage see labor year employers be most and intensifying visibility.

I'll Now, full of key highlights the through fourth it the to turn Dmitry and Thank the you. to year. you quarter walk

for I Q&A. and overview you, thank results, and for time have usual, of Good us call. as year-end do everyone, afternoon, this on quick Thank Mikhail. joining enough will you

the dull in an favor, year it by to imagination Company ability of as and than to recession out but Looking economic a stronger most our again turned coming backwards, resilience of our demonstrated XXXX be equally history. no volatility of called one once ever. stretch We even can important be business hence, out of difficult, the our year in

have which effect And new of fourth subscription year-on-year, by levels quarter. a by recovery went despite Our revenue on significantly with pre-COVID long-lasting year, to XXXX revenue to growth. we up progressed hopefully will switching challenging overall monetization a end a model, strategy, on full growth RPC our X.X%

headwinds. market retained online our indicate provided margin strict product demonstrated continuous growth, have in In even strong our equivalent profitability revenue in and all quarters, carried performance. revenue top overall and and despite platform generated dynamics market out in of became to managed core pricing million, Last of manage the in expansion online initiatives acquisition of our EBITDA eventually impact year year, the organic range We significant of blue compared our most annual the regional we differentiation XX%-plus recovery. to line November. noticeable in business increase facilitating segment, on and with XXXX. right is made all On we XXX QX, ability cost base discipline the pre-COVID financial which untapped Throughout Zarplata XXXX, to overall collars and SMA. Our in of development operating top economic Russia, this metrics

During XXXX, all Russian million new new regions gap inflow leadership net with we in added and of more terms expanding sustaining CVs, competitors. in the than candidate X

high active importantly, More of applied either were we or visible the maintained XX% platform last of total our CVs share two CVs. years. over on updated

move strong blue becomes new Especially monetization, have to crucial. So, we this XX% we growth. circa worker relevant. where CV very we as year-on-year see trends this access very categories database demonstrated remains in collar And

end circa of considerable our this quite all observed secured XX% employer job the similar testifies CVs of traction blue in side, of just we As category, dynamics. collar market. XXXX, from this On

was Similar number existing especially therefore, vacancy in by total and blue balance consumption strategically and we're right strong, It's side collar postings clients. dynamic. content, very As demand important pleased representing supply vacancies casual us growing supported job very new to pleased end And such of on strike seats. collars. inflow between total XX% -- up, with strong blue platform it's of are for very concurrent of XX% the of customer of growth XXXX, the

during terms strong December. no in almost four decline, interview XX% invitation growing Our year-on-year and and remained seasonal sentiment XXXX in in of quarter

back year-on-year. numbers. Now, giving bit pre-pandemic a little quarter, levels, about growing our fourth XX% QX to specific more came In revenue growth the

April do, year. in Importantly, from we despite February this Xst our increase we January, January of to trends the revenue as see price and postponement trending Xst usually

by some discretionary was and Our of affected in bonuses adjusted EBITDA fourth slightly our to hiring paid four. the in quarter quarter margin XX.X%, employees resume a level

finally Our our office XXXX completed was million renovation. QX or as in revenue X% RUB we CapEx XX only of

visibility back effective is Our growth trends contracts. on category accelerated XX% to predominance the this job to year-on-year. in price product effect came quarter. also became less to the to In back working a XXXX in encouraging quarter, environment, future QX, as consumption duration subscription revenues Being and -- came Growth significantly and CV as demonstrated mostly transition dynamics of business growing key dynamics be due and Key Bundled proved generally long-term We more segment. susceptible fourth to customers, consistent previous the to access. the to to And growth and of year-on-year. that the in advanced with small we've in Key a new moved pay-per-contact Accounts by inflow medium actually XX% accelerated majority well Account We which posting short-term vast strongest our of this sensitive year-end. uplift new seen the database of average increase, saw fully at already to model new contributes on of year-on-year. product volatility with businesses, of scheme. of recovery X%

service a meaningful be substantially over revenue we our subscription approximately revenue to comfortable maintained portfolio, in migration that this onwards. some heightened year. share Other very canceled of that withstand We and to this for acceleration periods expect effects expect of reason. and experienced XX%, last events what offline from XXXX growth last We volatility year, which we value-added affected us helped was by year were the

our above end, year-on-year. category VAS branding and growth, solid And revenue in shown the average growth, However, price XX% has exceeding group performance product demonstrated year-on-year.

Despite increased fact base than segment. Turning by circa that usual rate by paying the client affecting a now segment, to have we XX,XXX we SMA results hire, saw customers. this especially our during year customer the lockdown churn higher

categories while initiatives driven During customer client demonstrated packages. double-digit QX, revenue SMA consumption growth big pricing in being all Key with growth expansion, Accounts, by base and strong mostly both

plan Our client QX and executed QX acquisition facilitated customer new intake. in

acquired 'XX from RPC in growth by who with During on fourth increased see dynamics. customers XX% all registrations their customer 'XX average. revenue with vintage number new Clients conversion a than all to more client categories record during demonstrated year-on-year growing kind encouraging of high XX% started very the before customers. quarter, categories customer HeadHunter paying grew XX%. request per We across Those average XXXX of by spending using

meaning that turbulent long advancing been have we monetization So our year. such a strategy, in even

talk Grigorii to to it our for financial handing Now, performance.

you, and everyone. Dmitry, Thank hello,

give some Let me side. first you detail the on cost

from XX, in XX.X% on adjusted As decreased points fourth you slide circa quarter the our XX.X% quarter has XXXX, fourth margin by in in the XXXX percentage X see XXXX. the fourth quarter EBITDA

are we mentioned, for to the will already to probably was our fourth the explain quarter that in expenses the At As growth personnel the time, elevated profitability. sustain same due year XXXX, full which XXXX, I in later. Dmitry able

in XX.X% Our XX.X% the year the full XXXX. adjusted compared year EBITDA for margin was to

into dive buckets our expense Let's XXXX. key the quarter in fourth

a development, third to of to by million, XX approximately expenses to key these and were to the response cost and new XXXX, most which during earlier bonuses marketing discretionary part in our personnel hirings compensate XX.X% hiring increased a sales personnel increased program the three XXX beginning our driven second, bonus our was reduction indexation people in COVID-XX. for factor, of and reduction year, in of we fourth decided to the and wages pay was factors: teams; hired of Our XXXX; in the first, by order of and RUB we that

As of of the has beginning. hiring by the percentage as a discretionary in revenue EBITDA adjusted mentioned result I've which increased, percentage margin increase and bonus expenses paid, of points, in in resulting a personnel the decrease X

quarter RUB XXXX. quarter expenses which XX% was increased compared spend to XXXX revenue, fourth of in marketing in million. to fourth by was the XX.X% of Marketing Our flat the XX% XXX

in certain has XXXX of items, a to as revenue. XXX it the revenue, and percentage but of as quarter other non-operating expense million. decreased by of excluding Our XX.X% This RUB flat bucket was expenses general administrative a fourth increased percentage

margin full For XX.X%, in was said we've the EBITDA compared as XXXX. adjusted before, year XX.X% flat to year the full XXXX, our

various a increased on and non-operating expense exchange non-operating personnel increase year foreign flat wages of as of flat by increase year, and percentage as full full for personnel in items, additional the was year. the and The percentage back The revenue, items revenue resulting year for in our in of to as personnel people change administrative was gain, were margin also in full offset marketing XXXX as indexation expenses in revenue the the of percentage XX of XXXX. have EBITDA in change headcount year-end. while expense hiring Our a adjusted mostly people during resulting XXX adjusted adjusted in the expenses in the spend other general for the

Moving other on to key indicators.

in decline Zarplata excluding of as XXX a RUB XXX Our acquisition our XXXX. year-on-year, office assets in and we costs was million, summer the of renovation due CapEx project in finalized primarily down was RUB it XXXX, million to

As of were billion, in working a result, RUB costs. other revenue XXX year of XXX increase XXXX, capital minus customer decreased in office capital due Zarplata. increase expenses contract XX, RUB of payables December to the due X.X% Net as payable million X.X circa the by including our XXXX, renovation full to an million for prepayments, acquisition liabilities from of consideration an RUB and primarily to for

RUB million expense in to the from Our And nondeductible full XXXX the year in decrease to RUB for XXXX in of was XXX back XXXX. income rate on in XXX XXXX tax million has XX% the compared decreased the expenses. in XX.X% effective tax

Russia, to change was billion year the here from to used paid the the of activities the in cash sorry, decrease X.X cash year XXXX. Net generated the for X.X The sales. operating decrease the in -- billion metrics. billion was increase acquisition the a RUB Now, full of generated X.X in primarily key Rate on XXXX. Key back XXXX growth RUB In generation Bank due compared RUB and Central in XXX investing Zarplata. to RUB payment XXXX, was turning the used compared in interest in interest to increase of billion RUB activities This in of in we X.X million driver

billion X.X RUB issuance generated of RUB activities billion financing payment to The was Also, to the RUB year, bond XXXX have X.X compared RUB billion paid have billion XXXX. We XXXX. X.X used we last here in major in billion X change in driver XXXX. RUB from in dividend X.X compared

XXXX, XXXX, X.X XXXX loan decreased back other and of from million and to in the billion and payouts bank we loan the Our in in circa the other due in to as XXX repayments RUB decrease RUB mostly repayment on onetime amended bank schedule our XXXX. also in repayment duration loans

billion X.X X.X dividend offset RUB RUB by a net circa by RUB EBITDA And mostly RUB Our from increased XXXX. due as our billion times operating which to for moving X.X finally, Zarplata from our X.X XXXX of X.X paid debt and billion, increased EBITDA outlook in XXXX. payout, leverage were the has to X.X generated times as And a result, end activities. billion for to acquisition,

Assuming escalation from position expect on we competitive in the our level based on year-to-year XX% range the XXXX concludes our questions. year to and presentation further to in and the XXXX. no of performance, of opening fourth COVID-XX now are and the full pandemic XX% increase to group our solid floor This And compared the XXXX to your results. we the revenue quarter

Goldman Vyacheslav Instructions] Thank line first the you. your The Degtyarev Please of from question [Operator from question. comes Sachs. ask

much presentation. couple very A the for Yes. questions. of Thank you

here. outgrow Basically, in think would expenses and among relative share would being also, across gainer And and will perform how acquisitions? a do think the key So, blue competition? segment And assess think cost competitors, do do personnel your the any potential share about be excluding you XXXX you like-for-like appreciated the are expenses? on you the Firstly, you basis, color how revenues in among margins, active the the secondly, most trends components the marketing that the how who collar market they’ll the particular?

to Just on the margins? take question margins on for we XXXX, was right? your guideline the So, clarify,

Yes.

segments It's the still I Yes. we would of economy encouraging, still understand right? quite guidance is at Look, still debated I is time, not any relatively environment And And but of margins certain to decided on things we -- same And year-to-date, we not think overall. how provide uncertain. internally. this say, time, that, yes, point struggle. at Because out yet. yes, at -- we official of quite developing, all, this are the prevailing woods experiencing the economy just --

quite and we range feel year for a provide with wide comfortable quite So, revenue that. next

upside. X% extent, market to to bit kind just are expenses perspective, revenue revenue our a year certain market report year, safe happens our and expansion. actually that And and share inorganically, we It player. of gain, bit of tied our share right, we a Market all, we margins, majority right? continue I it term expansion, market the it it's was to for to a the further significantly try from be all towards the we always always because be may say generally, also, feels First some It speculate the substantial but we vast numbers. of increased, once combat share to report, last upfront. on function a because not of recovery quite situation year, speculative, and them estimated expect But competitors cost maybe -- a X% later little right? around -- because market a of acquired market. after For and preserve, we come longer not growing could that some adjust margins But a at of we'll just But growth back gradual think economy. as of guided always a don't

So, in blue and collars that's operate and the accretive. among regions they smaller predominantly segment of businesses. And

think less that So, proportionately our in more affected share also blue or collar. I

And into the look Avita right? As of right? and of it dynamics. So, And actually sits we Because Avita. and are months, is blue streams kind I while effectively, rate last growth. And organic splitting to experiencing business vacancies, kind market is if And dynamic out a any players as the believe business the white would collars, is white. blue even others, high. few you targeted outstripping that their the we It's if tell not there you you believe for we're right? dynamics our dynamic vacancies, share almost clearly entire posting job I look, or outperforming collars, up. of to at to only blue significantly also dynamic, for evolution, almost at and that you revenue revenue split our that are at And we quite going split share, market out XX% the what are at who and was us look Avita that are clearly just two gaining in collar if look example, comparable twice growth relatively is it be can at QX, blue

that to the we are close anyhow other So generally, this players, don't seems growing they're like we see before gaining.

The of next Ivan your Capital. question question. from line Kim Xtellus comes from Please ask

Two please. questions my from side,

January my year? because last on comment year were Firstly, kind the of comes pricing then, February, you that you And later and seeing revenue which on be the will just second marketing, specifically. than growth can this in more of maybe the sort growth question pre-monetization

talk to also marketing given that lot. to expect your If sales what high, grows fairly revenue but of the in budgets your marketing can about remain of in you a terms rivals 'XX,

any So, on be will you. that comments Thank appreciated.

Yes.

a few all best to Just significant, see with started now, the words quite also across February all market acceleration while We March that, compared performance performance. month effectively, strong is We December December year-to-date stronger And on noticed and this the products. than than year is XXXX. better segments virtually exceptionally February. we and January, in was

kind constantly kind outperformance for time, of within what at also we wouldn't comfortable Key from And we we you of and acceleration of of and driven our that consumption month-over-month improving to of of monetization. kind may drivers kind by year. device Accounts numbers, read from started consumption our their segments. did medium introduction kind than and businesses, this product, growth from of across I vacancies think of our any see job guidance, predominantly CV small pretty they accelerated before just see the because we numbers consuming last range. Accounts We posting whole main this year expect it's So, And all online I provide Key growth but also, more feel for would the is introduction. specific point we, effects our shift monetization expect this noticed -- that of the of kind side

save to trying they're Just contact somewhere. on

increased these there effectively So, quite as them don't said, And back we both factors That's that question. the you believe products yet. do more, And plan over robust. XX% the We on around not roll almost rightfully we year. we would XX%, the expect to significantly to a April, first not by or from bit products some all grow less. first, so prices prices but

decreased the as know, were and Because some sense marketing We discretionary. of big investing they kind second, especially are time, And throughout our budgets. the the and see not we this our beginning in within is that business. see the also expectations mentioned at marketing this spend. flexibility recovering and the depending you do. right, at performance, because Generally, the increased you top-line On expenses we so, of or market our we They of on lot that keep competitors investing. it's growing, strategy, so retain is guiding year economy a point of year on of

be that's environment; regardless will in second competitive of competition the kind growth. half on actually us the we second, for just year, of of investment, the expectations potential our we first, great revenue boost just because right, reflection to because defining marketing it So, that a a saw on increased last return

strategy. also this just follow we we’ll same and see market maybe the So, will the year, how develops

margin revenue below would fall all, priority For be of first XX%. growth, us, don't expect driving the we just the but

The question & from of comes the line you. WOOD Dmitry Vlasov Thank from Company.

and do first -- you -- your increase? enterprises monetization to for expect do prices monetization you when medium expect entering start And other when to start actually small When So, do see question do accounts? see your opportunity segments? you. expect you see you when the on do on to start And users? is some is expect question would those strategy. When start -- you to When segments. second of in Thank you to new the to

this growth and have right? -- check, But and seeing obviously, if healthy constantly been in outpacing when average not Well, much years to point, next three become and see actually, base clients can down. kind disproportionately our in growth, higher our although SMA, main more segment, vintages, split even of cheaper and use bigger monetizing potential, the to the It's because of for with it's just target medium, monetization. we consumption Dmitry. going can our churn. you target bigger in at two see use enhancing they at more up and we customer accounts, look started go value provide. they this not almost may for plus, And and I we definitely time we historical any few you vintages, already in we aggressive think we already small services. bit for RPC a you, monetization -- a notice At we average kind But you that see the all for around Thank pay years monetization, didn't small growth the ago, the little because more main XX%

a constantly and the it think or to where acquire that steps So, that the we've new do in growth well, say already And to And start three whether platform dynamics. market trying attentively at overall the automation strategy, long the made look it's as because very to say should by where of area significant probably automation portfolio. at one pillars And we we this be most player we be that where a automation expansion shorter HR the changes, HR it's growth we benefits. present actually term, lasting, temporary we and just and at surface. dynamic But will with. is in believe they definitely just early now I contribute that products the potential. markets, business, segment internally find in also we of right invested specifically significant have some significant I major the of the opportunity. right role We're we our way, driven terms take want would is look to and market, We monitoring. market see I the of And HR we think of in in it's scratching in we of legislation other effect also right, definitely We see space. RPC areas, we're one segments, a some

[Operator Instructions] comes from line UBS. The of the from next [indiscernible] question

have go to current year your leverage. Do quick X.X? on a down I it question you the this on expect

acquiring I new M&A making think are depend or kind we debt it any projects. any would of on whether

kind of say it's increasing hard go in So, also that I to are these that regular EBITDA and for we Provided the definitely. would not, down payments slightly is leverage the as that, as make say we would XXXX.

The next question comes from the line Stanley. of Miriam Adisa from Morgan

Just two me. questions from

also they know with same to on seen the just current to April know for you you on as specifically personnel big for or with not And trends there have in about just on the mentioned then, Firstly, give on be bit you business? Zarplata, anything the the your could trading. confirm you're margin on QX And specific Zarplata call there as costs. level? just any the if that another group? out Thank the mean, also but more if the rest putting Zarplata, of year, well just share broader needs and any you're for in color from step-up then, going be up to a strong -- giving I prices I you. guidance, to there line can Is hiring this business? color how thinking you're I

Grigorii. is this Miriam,

guidance to Company, I terms depending the investments situation, making our that wouldn't personnel year, to Yes. our towards kind headcount of development the competition in development, I that on moving the in it what the is Probably, kind not are et I would in revenue as strategy. personnel lie major say of increase some That salaries think, also of probably there's on expenses, for buckets, mentioned, during the because et Dmitry would say or expense cetera. on of we is a place already right? extent, plan see officially probably we cetera, in -- significantly specific in XXXX. team kind

and also reflective stronger say, now kind in quarter. Miriam. that's see that the recovered, of before average Zarplata, third. I'll dynamic, and market I group what lagging, take they we little would quarter-to-date and of their they A second position. perform On the Hi, bit than fourth

example a smaller operating of in environment player I a think, it's HeadHunter. bigger like to a compared good company, much today's

tax First Zarplata selling year. utilize VATable second, our used that licenses And became competitors, that particularly non-VATable benefit, They thing. to as were non-VATable. this

I the made course, also taxable competitors, so, effect, faced that who by that in a extent same can that us income, within But our a from clients Zarplata So, and limits we this generally, of in certain kind agreed. budget actually them But the that are think, they're more now, it's Avita, their right? license. besides returning or because sold that And February, never actually problem of just they growth. who already deduct operating of we see of year. some to the less And to all certain monetization

they In slightly different a terms have of cycle. prices,

it group, integration process extent roadmap, align now. of of a pricing. of and we potential see because priority to our our of are first in across that's product kind terms And in also Zarplata some cross-sell We and lot and terms products trying our align a

priority the second for will high our be think I clearly quarter. that

half what prices grow But, some and would year. in more for hopefully synergies even plan to this second we absorbable and also be HeadHunter. results the And budgeted aggressive they than originally

[Operator comes question. Sukhanova Maria Please next line from your of Instructions] question ask from BCS. the The

segment. could you you your the for, it's services of your Thank Talantix. companies, revenue group automation are more environment? were like pressured like Skilaz that, use question update -- like of probably, base And I XXXX to using are about what the plans us of something in and for instance, or instance, for wondering like of use by any a strategic just Could what Talantix, whether of it, in automation, a terms more voice services, or trends the benefits saw I'm what you. if for base with XXXX please macro have like, HR happened specializing monetization? you

honest, you, severely them the quarter circumstances of Thank they because was visibility the last revenue. to the say hold expensive obviously, programs that try Skilaz. pleased I budget. in environment on And with all the We're be the Skilaz performance with wouldn't were helped a start very in companies, I'll and year. with second Maria. lost They put to terms of quarter. second almost under lack lot,

So that kind effectively client base penetration. their of affected

to kind go expansion. just Although interactional our and clients the need increased, didn't remote budget of they receive approval for for on automate

effectively, their quarter revenue their to third So, quarter the second the their but fourth, they targets. was it's original reaching client especially. very double base. actually managed base. almost And they and second challenging, they -- to They and that And -- double budget second recover to and managed managed

For we're clients. -- not consider we -- between this we later control while time spring, very processing we'll sourcing also we actually additional far, will in year, lot and of and this of But exercise of cross because so acquisition products, our synergies the services Skilaz June. so end about boosting pleased. option until it’s also consider identified kind their revenue have always products a And also, to sell our standalone performance, have

As probably kind scale because but Talantix problem, gated. same the just to -- smaller it's Talantix, of same is

just crystallize more We consider never to good And paying of which the a monetization, time, the At the just be pretty base. segment, under pressure stream, biggest year clients, more in result. was as honest. gain launch stickiness. Talantix midsized the first managed was to It's same Talantix around it's XXX So, pandemic. due revenue significant to a which is monetization to client

-- it's don't our we happened from as that two that see But over products we funnel. think about year. just segment, Talantix interactions in these noticeable in data you more hopefully And the us Talantix will become So, time. in of through while flowing interest, saw perspective, during very P&L, strategic. that and mid this should the Skilaz we restrictions pandemic, on that some a kind help will, raise sell gave and need offline client and And automation this that generally,

[Operator no Please further Instructions] are continue. this questions Dear time. there speakers, at

joining Thank Bye, you, And take care. bye. everybody, call. for the

Bye, bye.

Bye. Thanks.

That participating. conference you Thank conclude does for our for today.

a day. Have disconnect. nice all may You