Vk International Public Js Com · RUS:VKCO
Vk International Public Js Com — Mail.ru Group — Q4 2020 Earnings Presentation
55 slides from Vk International Public Js Com's earnings presentation, 2021
Slide 1: Quarterly presentation 4Q 2020
Quarterly presentation 4Q 2020
Slide 2: Ad revenue growth outperformance continues
Ad revenue growth outperformance continues • In 2020 Mail.ru Group’s online advertising MRG online advertising revenue growth vs Russian revenue increased by 5.3% YoY despite digital advertising market (%, YoY) the adverse macro factors and tight competition • Currently available data suggests that
Slide 3: Advertising: assisting SMB with migration to online
Advertising: assisting SMB with migration to online • We are well positioned to help SMBs transition to online by ensuring SMB active advertisers and revenues continuous access to superior reach through easy to manage ads and social mechanics, as well as increasing personalization SMB active adverti
Slide 4: Advertising: focus on performance and video
Advertising: focus on performance and video • We expect Performance ads and video ads – our key focus products – to continue to gain share in digital ad budgets Performance ads - clicks and ad spend • As we further improve ad optimization and measurement tools, we aim to gradually shift towards end-
Slide 5: VK: product enhancements drive solid growth
VK: product enhancements drive solid growth Some Q4 2020 highlights • VK revenue growth accelerated to 17.2% YoY in Q4 versus 12.9% in Q3, with 14.9% YoY growth for 2020 • VK maintains its leadership among domestic social networks, with an MAU of 73.4mn (+4.5% YoY) in Russia 220 Major updates in 202
Slide 6: VK Mini Apps: platform continues to expand
VK Mini Apps: platform continues to expand • MAU: +67% YoY in December to 39mn, which Active Mini Apps – Number means 53% penetration into VK’s Russia MAU of apps, thousands 25.9 22.1 19.7 • DAU: +169% YoY (to 5.4mn) 13.3 15 • The number of services on the VK Mini Apps 4.2 platform almost doubled, a
Slide 7: VK Mini Apps: ecosystem contribution
VK Mini Apps: ecosystem contribution • VK Mini Apps platform has been scaled to OK in December, with Mini App developers now able to add their apps across the two social networks simultaneously, benefiting from additional traffic and revenue. This is a new major step in the development of the Mail.r
Slide 8: VK Connect: active roll out of single ID
VK Connect: active roll out of single ID • VK Connect, the single sign-on platform for all Mail.ru Group products formed on the basis of VK, was rolled out in June 2020 • After logging into any service with VK Connect, users can access any other MRG product in just one tap, without having to enter l
Slide 9: VK: further steps in social commerce
VK: further steps in social commerce • Social commerce is among the major focus areas, with the launch of courier delivery on VK Store, including delivery via VK Taxi in Q4 • A rising number of users make their purchases entirely within VK. B2C transactions completed through VK Store grew from 8% to
Slide 10: VK: enhancements in video offering
VK: enhancements in video offering • VK Clips accumulated ~31bn views within 6 months since its launch, with 3.5mn+ clips having been published by 1.1mn content creators and 75.6mn people having watched clips as of the end of 2020 • The number of views per day reached a new peak of 230mn in December
Slide 11: VK Clips development: AR platform and ads
VK Clips development: AR platform and ads AR Particle System Digital Merch Ad overlays Action button 11 Source: Internal data
Slide 12: OK: unique social and entertainment platform
OK: unique social and entertainment platform • Russia average MAU in Q4 stood at 40mn, with mobile MAU at 34mn • Total number of unique mobile only users in Russia grew by 11% YoY to 27mn in December • IVAS, including games, remain the main drivers of OK’s revenue, with OK users having sent 52.8bn v
Slide 13: OK: product updates and ecom initiatives
OK: product updates and ecom initiatives Active product updates in Q4: • Moments photo and video stories format was launched in October, with MAU at >11mn in December • “Okno” video chat based dating service was released in November • Marathons, a service which allows to share photos related to part
Slide 14: OK: multiple completed cross-integrations
OK: multiple completed cross-integrations Ecosystem-related product launches continued in Q4: • VK Mini Apps was rolled out on OK in December, with Delivery Club already available in OK as a Food mini app and Citymobil accessible as a Taxi mini app • OK also integrated a service which provides vacan
Slide 15: OK: SMB among the key ad revenue drivers
OK: SMB among the key ad revenue drivers • The number of advertisers in OK was +34.8% in 2020 • OK continued to invest into SMB solutions, with the contextual targeting launch inside the OK Ads Manager (internal ad creation tool) • ~1mn users running businesses through their OK pages • The number of
Slide 16: MY.GAMES: international revenue driver for the Group
MY.GAMES: international revenue driver for the Group • MY.GAMES revenue rose by 27% YoY in Q4 (to RUB 11.1mn) and accounted for 34% of the Group’s revenues • International (ex Russia + CIS) gaming revenue share in Q4 stood at 77% (vs 76% in Q3 2020 and 66% in Q4 2019) • 76% of MY.GAMES revenues come
Slide 17: MY.GAMES: solid post-lockdown user trends
MY.GAMES: solid post-lockdown user trends • Total number of registered users grew to 770mn (+165mn in 2020), with average MAU at 21mn in Q4 2020 (+8.8% Top 10 revenue generating products in 2020 YoY) • Our franchise titles (War Robots, Warface, Hustle Title Total revenue (RUBbn) Installs (Total + gr
Slide 18: MY.GAMES: active marketing in Q4 2020
MY.GAMES: active marketing in Q4 2020 • Games EBITDA margin declined to 13% in Q4 due to active focus on retention of covid-acquired users through marketing investments into our top-performing mobile games and support of new titles (incl. Storyngton Hall, Rush Royale, Grand Hotel Mania) • Despite th
Slide 19: MY.GAMES: broadening portfolio, mobile focus
MY.GAMES: broadening portfolio, mobile focus • With 5 new in-house mobile games launches and two acquired mobile-focused studios in 2020, mobile remains the top business driver for MY.GAMES • War Robots released a new Remaster version while maintaining the leading product in terms of revenue generat
Slide 20: MY.GAMES: latest PC and console highlights
MY.GAMES: latest PC and console highlights War Robots x Serious Sam Warface updates Skyforge on Nintendo Switch crossover …... • War Robots players competed • Relaunch of Warface in Turkey was • Skyforge was launched on Nintendo against monsters from Serious Sam Switch, becoming the second title of
Slide 21: MY.GAMES: M&A activity
MY.GAMES: M&A activity • Our M&A strategy is focused on product and studio acquisitions that can leverage synergies with the broader MY.GAMES ecosystem and significantly increase our business value. We take into account several factors in our investment decisions: size and skills of the target’s tea
Slide 22: MY.GAMES Cloud
MY.GAMES Cloud MY.GAMES Cloud was launched in late Key milestones: 3Q 2020 with access to high-end quality • Beta launch in Russia in September 2020 games from any PC via streaming technology • Up to 4K gameplay quality with 120fps frame rate • >150 titles available during beta stage from top game p
Slide 23: DonationAlerts: activities with streamers
DonationAlerts: activities with streamers Donation Alerts is evolving from a 2020 results: donation service into an all-in-one • Launched apps for streaming on the most popular streamers' tool platforms including Twitch, Youtube, VK • Launch of an advertising platform for streamers with plans to ent
Slide 24: Online Education: spurred by growing demand for high-quality and convenient education
Online Education: spurred by growing demand for high-quality and convenient education • Skillbox and GeekBrains are the leading • Service is provided on own platforms • Platforms offer an opportunity to services on the growing market of online (LMS), which allows to track different expand a matrix o
Slide 25: Online Education: rapid expansion of product matrix and customer base
Online Education: rapid expansion of product matrix and customer base Cumulative number of registered and paid Growing number of courses and professions students, thousands* Skillbox products GeekBrains products Registered Paid Incremental increase 464 699 2018-2020 CAGR 360 +144% 295 297 212 216 20
Slide 26: Youla: steady growth in revenue and traffic
Youla: steady growth in revenue and traffic Revenues: • 2020 revenue reached RUB 3bn (+43% YoY) - top of guided range Youla revenue and traffic growth • Strong pipeline of Group’s ecosystem integrations, as well as B2B 2017-2021E focused developments is to drive further growth EBITDA: Revenue, RUB b
Slide 27: O2O JV has experienced rapid GMV expansion since its launch
O2O JV has experienced rapid GMV expansion since its launch O2O consolidated Gross Merchandise • O2O JV showed impressive GMV* growth on pro-forma Value*, RUB bn basis during 2020 FY despite the pandemic and its adverse impacts, particularly on the mobility businesses, 45 with GMV above RUB 118bn in
Slide 28: Delivery Club: Ongoing product innovations with major focus on tech stack
Delivery Club: Ongoing product innovations with major focus on tech stack Jan-Oct April May May May May-June October E-grocery Take-away Pharma Launch Big Zones With VK Food Rider App Table roll-out Launch with VseApteki Citymobil update booking 28 Source: Internal data
Slide 29: Delivery Club is the market leader in terms of users
Delivery Club is the Ready-to-eat food delivery market leader in terms of users… • COVID had a positive impact on the overall user base of the Russian food delivery market • After the easing of lockdowns in Q2, user base stabilized at a slightly lower level, which was however above the pre-lockdown
Slide 30: …and downloads
30 1,000 1,100 0 100 200 300 400 500 700 900 600 1200 1,200 Jan-2018 Feb-2018 Source: AppAnnie Mar-2018 Apr-2018 May-2018 Jun-2018 Delivery club Jul-2018 Aug-2018 Sep-2018 Oct-2018 …and downloads Nov-2018 Yandex.Eda Dec-2018 Jan-2019 Feb-2019 Mar-2019 Apr-2019 May-2019 Downloads, iOS and Android com
Slide 31: Delivery Club: strong growth in 1P orders with stabilized 1P share
31 Q1 2018 Q2 2018 Source: AppAnnie Q3 2018 1P orders Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 + 2.2x Q3 2020 Q4 2020 Q1 2017 3P Q2 2017 Q3 2017 stabilized 1P share in total orders 1P Q4 2017 Q1 2018 1P/3P orders split Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Delivery Club: strong grow
Slide 32: Delivery Club: rapid growth of orders in Ready-to-Eat and E-grocery
Delivery Club: rapid growth of orders both in Ready- to-Eat and E-grocery segments RTE orders, mn E-grocery orders, mn 1.6 18 17.0 1.6 +2.1x YoY 16 in 2020 15.3 1.4 14.4 14 1.2 12 10.7 1.0 0.9 10 9.2 0.8 0.8 8 7.6 0.6 6 5.4 5.4 0.4 4 2 0.2 0.1 0 0.0 Q1 2019 Q3 2019 Q1 2020 Q4 2020 Q2 2019 Q4 2019 Q2
Slide 33: Delivery Club: frequency and active customers
Delivery Club: frequency and active customers Active customers*, mn Frequency**, # of orders 5.0 4.5 3.8 3.9 3.7 4.0 3.3 3.4 3.5 3.2 3.2 3.1 3.0 2.5 4.3 4.6 2.0 4.0 1.5 3.2 2.9 1.0 2.3 1.6 1.7 0.5 0.0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Source: Internal data 33 * Unique u
Slide 34: Delivery Club: continued growth of all the key metrics
Delivery Club: continued growth of all the key metrics Geographic reach Active customers Cities of presence, 1P 1 Overall geographic coverage 1, 3P+1P DC active customers 3, mn Q4 Q4 38 150 2019 2.9 YoY 2019 Q4 +1.6x Q4 186 299 2020 4.6 2020 Vendors on the platform Revenue 4, RUB bn 3.1 Number of ve
Slide 35: Samokat: express e-grocery and express growth
Samokat: express e-grocery and express growth • O2O JV continues to integrate Samokat into the ecosystems of O2O JV, Sber and MRG by cooperating with Youdrive, Citymobil, AliExpress, SberDevices and SberLogistics, among other entities • Samokat approached 8.5 mn orders in Q4 with >100,000 in daily o
Slide 36: LocalKitchen: growth supported by new openings and higher intensity
LocalKitchen: growth supported by new openings and higher intensity • In Q4 2020 LocalKitchen continued its growth both organically and via new openings (+12 new kitchens in Orders, thousands 2,000 80 Moscow) 1,862 • In December 2020 LocalKitchen had 45 kitchens across Moscow versus 29 in January 20
Slide 37: LocalKitchen: active growth of customer base with solid retention
LocalKitchen: active growth of customer base with solid retention • Active* customer base grew by 30% QoQ and ~2.5x YoY Active users, thousands following the new kitchens openings, reaching the 139k New Customers unique monthly users in December • Providing high quality service to its clients Local
Slide 38: In 2020 Citymobil remained the fastest growing aggregator
In 2020 Citymobil remained the fastest growing aggregator reaching 3x YoY growth in rides In Q4 Citymobil demonstrated 2x YoY increase in … remaining the fastest growing aggregator across all rides … geographies of presence Citymobil – quarterly rides, 2020 vs 2019 % of riders that use Citymobil 1 2
Slide 39: Major platform improvements help drive marketplace efficiency
Major platform improvements and rising scale help drive an increase in marketplace efficiency Supply hours per driver Driver acceptance rate Driver utilization in Moscow, hours in Moscow, % in Moscow, % 2020 2019 2020 2019 2020 2019 +1.4x 1 +1.7x 1 +3x 1 November December November December November
Slide 40: Urban mobility platform development continues
Urban mobility platform development continues • Delivery business is demonstrating major growth • In 2020 VK Taxi rapid expansion allowed a full-scale dual brand structure Citymobil delivery orders +2x +30% VK Taxi rides +2x QoQ average MoM growth growth +4x +8x Q1 2020 Q2 2020 Q3 2020 Q4 2020 Sep-2
Slide 41: AliExpress Russia: wide assortment and major audience
AliExpress Russia: wide assortment and major audience > 100mn > 150 thousand SKUs sellers 29.1mn 8.8mn MAU DAU > 130mn >61mn >25mn Registered accounts Active registered users People made purchases in 2020 in 2020 41 Source: Internal data
Slide 42: AliExpress Russia: local business generates 25% of GMV
AliExpress Russia: local business generates 25% of GMV Number of +7x Number of +15.6x 14.5 local sellers, 35 individual thousands enterprises, thousands 5.2 0.9 Jan-2020 Jan-2021 Jan-2020 Jan-2021 Rapid growth in the regions: number of sellers, YoY growth Number of +3.6x 5x SKUs offered 5.5 by local
Slide 43: AliExpress Russia: ongoing transformation
AliExpress Russia: ongoing transformation Improvement in logistics: • The network of available pick-up points (including parcel lockers) increased to 18,000 • The number of logistic partners is expanding (incl Svyaznoy, KupiVip, SberLogistics) • Cainiao logistic partner is actively investing into in
Slide 44: Financial & segmental highlights
Financial & segmental highlights
Slide 45: Revenue dynamics, RUB bn
Revenue dynamics, RUB bn 45 Source: Internal data
Slide 46: EBITDA dynamics, RUB bn
EBITDA dynamics, RUB bn 46 Source: Internal data
Slide 47: Communications and Social segment performance review
Communications and Social segment performance review Communications and Social Revenue, RUB bn Revenue growth drivers in Q4 2020: +4.7% • Continued growth in the key engagement metrics, particularly within the VK social network 50.3 52.7 +9.6% • Recovery of the ad market, with online advertising acc
Slide 48: Games segment performance review
Games segment performance review Games Revenue, RUB bn Revenue growth drivers in Q4 2020: +30.4% • Consolidation of Deus Craft studio in October, with 40.8 Grand Hotel Mania being top-5 revenue generating title 31.3 +27.1% for MY.GAMES 11.1 • Solid performance of recent releases (Storyngton Hall) 8.
Slide 49: New Initiatives segment performance review
New Initiatives segment performance review New Initiatives Revenue, RUB bn Revenue growth drivers in Q4 2020: +95.5% 14.3 • Online Education (largest contributor to the New Initiatives) +101.5% revenues were up 3.1х YoY 7.3 • Youla delivered 43% YoY revenue growth in Q4 to RUB 5.9 1bn, driven by B2B
Slide 50: Leverage
Leverage 0.0x 0.0x 1.0x 2.4x Gross Debt, RUB bn 63.9 15.2 Gross Debt incl. lease 28.3 liabilities / 4.8 48.7 LTM EBITDA 0.0 0.0 23.5 2017 2018 2019 2020 Loans and Convertible Bonds Lease Liabilities Net (Cash) Debt (0.7)x (0.4)x 0.6x 0.9x including lease liabilities, RUB 24.6 18.5 13.7 bn 9.4 Net De
Slide 51: Headcount
Headcount • In 2020 MRG headcount expanded by ~40%, as we invested into multiple new products and services as well as further development and rollout of our ecosystem elements • Hiring within our online education assets, VK and Games were among main drivers of the Group’s headcount growth Total head
Slide 52: Guidance for 2021
Guidance for 2021 Group revenue 18-21% revenue growth (~RUB127-130bn) Group EBITDA Improvement in margin YoY Games Double-digit organic revenue growth ~RUB 3.6-3.9bn in revenues with a progress towards break- Youla even (anticipated in 2022) Online Education Revenue at RUB 8-9bn, +ve EBITDA margin S
Slide 53: For further information please contact
For further information please contact: E-mail: ir@corp.mail.ru 53
Slide 54: Disclaimer
This presеntation has been prepared by Mail.ru Group Limited (the “Company”) and comprises the written materials for a presentation to syndicat e research analysts or certain institutional investors. Matters discussed in this presentation may constitute forward -looking statements. Forward-looking s
Slide 55: mail.ru group
@ mail.ru group