Vk International Public Js Com · RUS:VKCO
Vk International Public Js Com — VK — Q3 2021 Earnings Presentation
54 slides from Vk International Public Js Com's earnings presentation, October 2021
Slide 1: Quarterly presentation Q3 2021
Quarterly presentation Q3 2021
Slide 2: Rebranding…………………………………………………………………………….. Overview………………………………………………………………………………. Financial & segmental highlights…………
Rebranding…………………………………………………………………………….. 3 Overview………………………………………………………………………………. 4 Financial & segmental highlights…………………………………………… 5 Guidance……………………………………………………………………………….. 12 Advertising…………………………………………………………………………….. 14 VKontakte………………………………………………………………………………. 17 Odnoklassniki………………………………………
Slide 3: Rebranding: Next steps
• On 12th October we announced the company rebranding from Mail.ru Group into VK Next steps • The rebranding came as a natural progress of the ecosystem development strategy announced in 2020 where the social network VKontakte was positioned as the central element Legal entity and • We see clear pos
Slide 4: Revenue and EBITDA, RUB bn
Revenue, RUB bn • Group delivered 19% YoY revenue growth in Q3, with acceleration vs +17% YoY in +19% Q2 30.4 • Online advertising revenue continued to see strong performance (+28% YoY to 25.6 RUB 12.2bn), with VKontakte being the largest component. Advertising trends were particularly strong across
Slide 5: Financial & segmental highlights
Financial & segmental highlights
Slide 6: Group revenue dynamics, RUB bn
Group revenue oynamnics, RUB bn 1.2 30.4 27 02 OS 0.2 OS mein 256 MS 61 AD Q3 2020 Online MMO ~~ Community Education Other Q3 2021 Q3 2020 Ce Games EdTech New Eliminations Q3 2021 advertising games IVAS Technology revenue initiatives 2.6 88.7 77 17 wetoee 3.6 —— “02 734 0.0 9M 2020 Online MMO ~~ Com
Slide 7: Group EBITDA dynamics, RUB bn
Group EBITDA dynamics, RUB bn 48 0.4 04 8.4 r 16 — : 15 MMMM O01 4 66 || 06 -1.0 . 66 0.5 Q3 2020 Revenue Personnel Agent/partner Marketing © Other OPEX Q3 2021 Q3 2020 C&S Games EdTech New Q3 2021 expenses fees expenses initiatives 153 a 0s 212 a 196 12 a — —— - “ = _. 19.6 -49 21.2 “27 -04 9M 2020
Slide 8: Communications and Social revenue and EBITDA
Communications and Social Revenue, RUB bn +17% Revenue growth drivers in Q3 2021: 42.5 • With >97% of Community IVAS and >80% of Online 36.5 advertising revenues booked within the C&S segment, it +20% saw solid underlying trends in Q3, with 20% YoY growth 12.5 15.0 9M 2020 9M 2021 Q3 2020 Q3 2021 Co
Slide 9: Games revenue and EBITDA
Games Revenue, RUB bn Revenue grew slightly in Q3 2021: +13% • Recent projects such as Rush Royale and Grand Hotel 32.2 Mania were among the main revenue drivers 28.6 +2% • MY.GAMES saw no major game launches and completed 9.9 10.1 no significant acquisitions YTD • MY.GAMES supported its existing po
Slide 10: EdTech revenue and EBITDA
EdTech Revenue, RUB bn Revenue growth drivers in Q3 2021: +95% • Platforms launched 163 new courses and programs, with 1,210 in total course offer as of the end of Q3 6.9 • Units saw further growth in the number of students, with +56% the cumulative number of paying students reaching 3.5 2.5 273,492
Slide 11: New initiatives revenue and EBITDA
New initiatives Revenue, RUB bn Revenue growth drivers in Q3 2021: +52% • Recommendation platforms (Pulse and Relap) saw 7.5 combined revenue of ~RUB 345mn in Q3 (+141% YoY) 4.9 +68% • B2B projects, including Cloud saw strong growth 2.9 1.7 • Sales of the smart speakers provided a further boost • Yo
Slide 12: Guidance
Group revenue RUB124-127bn Group EBITDA Improvement in margin YoY Community IVAS Revenue growth in 2021 Revenue growth, MY.GAMES EBITDA margin of ~20% in 2021 RUB 3.6-3.9bn in revenues with progress towards Youla break-even (anticipated in 2022) EdTech Revenue of RUB 10bn+, further improvement in EB
Slide 13: Main consolidated assets
Main consolidat&d | . , assets
Slide 14: SMB ad revenues
SMB ad revenues With ~45% of B2C SMBs in Russia having presence on VKontakte and OK, further room for growth remains +29% ~7mn ~3mn Recent launch: auto-promotion tool for VKontakte groups advertising own services Q3 2019 Q3 2020 Q3 2021 Active clients using auto-promotion tool in VKontakte 1.2x • St
Slide 15: Performance ad revenue
Performance ad revenue Improvements in predictive models led to a 3-year high in ad clicks per user… +40% Ad clicks per user/day 2019 2020 2021 1.3x 1-Jul 1-Aug 1-Sep 1-Oct Q3 2019 Q3 2020 Q3 2021 …as well as to reduction in install cost for advertisers which boosted app install revenue Revenue from
Slide 16: In-stream video ad revenue
In-stream video ad revenue Optimization of ad delivery in OK instream video +52% brought 2.3x growth in respective ad revenue Revenue from instream video ads in OK 2.3х Q3 2019 Q3 2020 Q3 2021 Jul-21 Aug-21 Sep-21 Oct-21 • In-stream video ads showed 52% YoY growth in Q3 2021 16 Source: Internal data
Slide 17: VKontakte: DAU and revenue growth
VKontakte maintains its leadership among domestic social networks, with average Russian MAU of 72mn VKontakte Russia DAU, mn and DAU of 46.2mn in Q3 2021 • 64% of VKontakte users are accessing the social 47.3 47.9 46.6 46.1 47.0 46.2 network every day 44.9 • VK reaches 46% of Russian internet users
Slide 18: VK Mini Apps
• The number of VK Mini Apps Active Mini Apps – Number of apps, thousands rose by 66% YoY in +66% September to above 36,800, 36.8 with MAU of 34mn in 34.0 29.4 September (+26% YoY) 25.9 19.7 22.1 • Monetization of the platform 15.5 12.2 (mini apps and games based on VK Mini Apps platform) is progres
Slide 19: VK Donut and chat updates
• Content creators who joined VK Donut earned RUB >126mn since its launch • 10 content creators have already earned more than RUB 1mn each through VK Donut. This platform has become the main source of revenue for many communities • VK Donut has a 10% platform fee • VKontakte launched unique chat the
Slide 20: VKontakte Calls desktop app and B2B solution
In Q3, VKontakte launched the Calls In Q3, VKontakte launched a B2B solution for calls — desktop app: a set of tools for creating voice and video calls on • 2,048 call participants in one call at the same desktop, Android and iOS: time • SDK library that supports most VK Call features • Calls with n
Slide 21: VK Video
VK Video united all of the ecosystem’s video services: VKontakte, Clips, OK and others. VK Video is the #1 video platform in Russia by views and audience. The update introduced a range of new technologies: • Uploading videos of up to 256 GB • Playing videos and live streams in 4K • Streaming videos
Slide 22: VK Clips
• VK Clips video inventory exceeds 8mn clips from 2.1mn unique authors • New record of 383mn in daily video views has been set • DAU stood at 20mn in September • Time spent per user grew by 62% YoY in September, with the number of users spending 10+ minutes per day on Clips rising by 71% during the
Slide 23: Odnoklassniki key metrics
38mn 500mn • OK continues to grow the content recommendation in News Feed and Average MAU in Postcards sent separate Recommendation feed Russia +22% YoY 450mn Average DAU in Stickers sent mobile games +340% YoY 6.6bn +37% YoY Number of likes in Total advertising game Virtual gifts sent recommended c
Slide 24: OK Moments
Moments, service with disappearing photo and Views video, continued to see strong traction: • Moments MAU reached 26mn in September • During Q3 the number of views and reactions grew to 390mn and 42mn respectively Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2020 2020 2021 2021 2021 2021 2021 2021 20
Slide 25: OK new monetization tools
OK continues add new monetization tools Cross-integrations in Q3 +17% YoY +74% YoY • Recruiting service and The number of Revenue from the special section in OK main advertisers in Q3 internal ads manager menu with VK Jobs was within OK in Q3 launched • In September OK rolled out the AI-based voice
Slide 26: MY.GAMES revenue by geography and platform
• MY.GAMES revenue rose by 2.3% YoY in Q3 (to RUB 10.1bn) and accounted for 33% of Group’s revenues • International (ex Russia + CIS) gaming revenue share in Q3 2021 stood at 77% (vs 75% in Q3 2020) • Majority of MY.GAMES revenues (75%) came from mobile (vs 73% in Q3 2020) International revenue expo
Slide 27: Top 10 revenue generating products
• War Robots, Warface, Rush Royale were the top-3 revenue TOP 10 revenue generating products in Q3 2021 generators in Q3 2021. Rush Royale and Grand Hotel Mania were the largest revenue growth contributors Lifetime installs 2 Q3 installs Title (as of the end of • 20+ games are in development (excl M
Slide 28: Paying users, MAU and ARPU
• Average MAU stood at 21.0mn in Q3 1 Average number of paying users, mn 1 • ARPU dynamics reflects multiple factors incl. changes in -11% portfolio mix, revenue splits by platform and geography, 1.2 impact of new launches and live-ops activities. In 2021 1.0 1.1 1.0 1.0 1.0 ARPU growth is partially
Slide 29: MY.GAMES mobile portfolio
• At 75% of revenues in Q3, mobile remains the top business driver for MY.GAMES • Rush Royale (2020, IT Territory studio) reached ~14mn downloads since its launch in December with monthly revenue >RUB 400mn in September, being one of the most successful launches in MY.GAMES history • Mamboo Games jo
Slide 30: War Robots, Rush Royale, Left to Survive updates
Rush Royale updates War Robots updates Left to Survive • Achieved a new monthly • Battle Pass season «Yaga Gang», • Celebrated 3rd anniversary. new content: a new robot revenue record of RUB 410mn The number of installs in 9M Revenant, weapons, titans special by the end of Q3 and became versions, pi
Slide 31: LOST ARK, World War 3, Warface updates
LOST ARK updates World War 3 updates Warface Franchise • Launched «Tygon» major • Tactical online shooter by The • Merged Alpha, Bravo and update introducing new class Farm 51 studio (PL), started Charly servers and launched and rebalancing low-level pre-sales and scheduled CBT strong retargeting ca
Slide 32: EdTech revenues
• Platforms launched 163 new courses and EdTech revenues*, RUB bn programs (professions and faculties) during +2.0x Q3, including in programming and gaming 6.9 (41), design (30), marketing (21), management (19), multimedia (7) and others (45), with the >10.0 overall number of available courses surpa
Slide 33: Students and courses growth
Number of new registered and paid students, Growing number of courses and professions thousands* 756 Registered Skillbox products 662 Paid GeekBrains products 253 Incremental increase 562 210 464 454 385 153 360 342 145 128 124 295 297 119 212 216 185 163 156 143 143 136 40 103 94 36 30 37 64 17 21
Slide 34: Youla revenues and EBITDA
Youla revenues, RUB mn Youla revenues and traffic growth 2017- 2021E +28% MAU, mn Revenue, RUB bn 968 759 33 3.6-3.9 27 Q3 2020 Q3 2021 24 • Drivers: rising share of B2B sales 19 Youla EBITDA, RUB mn -58% -17% 3.0 2.7 EBITDA Margin, % 9M 2021 2.1 -169 1.1 -438 0.1 Q3 2020 Q3 2021 • Drivers: cost dis
Slide 35: VKontakte groups integrated with VK Classifieds
• Automated transformation from regular VKontakte post to listing was launched in August • When a user creates a post that very much looks like an ad listing ML model recognizes that and automatically posts it as a listing in VK Classifieds VKontakte groups integrated with VK Classifieds, thousands
Slide 36: VK Jobs and VKontakte integration
Vacancy coming from VKontakte VK Jobs revenue from integration with VKontakte Jan Feb Mar Apr May Jun Jul Aug Sep Jan Feb Mar Apr May Jun Jul Aug Sep • Cross-posting service was launched in July: possibility to post vacancies from VK Jobs to many job-related groups in Vkontakte. Vacancies are distri
Slide 37: Joint Ventures: O2O & AliExpress Russia
Joint Ventures \ \ O20 & AliExpress Russia. Ww
Slide 38: O2O GMV
O2O GMV 1, RUB bn • O2O JV perimeter includes Delivery Club, r_keeper (former Foodplex), GMV Citymobil, Citydrive (former Youdrive), EBITDA (as % to GMV) Local Kitchen and Samokat (the latter -16% -16% two businesses were consolidated in -20% -21% -20% 2020) -26% -25% 47.7 • O2O GMV increased by 1.6
Slide 39: Delivery Club users and downloads
Monthly active users (mobile apps), Downloads, iOS and Android combined, mn thousand 1,141 4.2 Delivery 4.0 4.0 3.7 3.8 Club 3.5 3.9 3.3 754 2.9 2.5 3.2 602 631 2.4 2.3 2.9 559 542 1.9 2.0 1.8 2.4 1.8 446 1.3 1.4 1.5 1.2 1.3 454 1.1 1.0 274 0.9 197 378 0.6 318 316 344 317 328 286 292 1.0 210 0.7 0.8
Slide 40: Delivery Club partners and regions
Regions of presence Connected DC presence region Partners 2 47.5k (+55% YoY) Source: Internal data 1 Population of cities of presence to total Russian population 40 2 Partners available for taking orders during the last month of reporting period
Slide 41: Delivery Club revenue and orders
Total orders, mn Revenue 2, RUB bn +45% +53% 1P share 4.0 22.1 20.8 3.6 64%1 18.0 17.6 3.1 3.2 16.1 15.3 2.5 2.6 10.8 1.8 9.2 1.5 7.6 1.2 5.4 5.4 0.9 0.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2019 2019 2019 2019 2020
Slide 42: Active customers and order frequency
Active Customers, mn Active Customers 1 2 Frequency 4.3 4.3 3.8 3.9 3.8 3.7 3.3 3.3 3.2 3.4 • The number of active 3.1 4.9 5.1 4.6 4.7 users increased by 27% 4.3 4.0 YoY in Q3 (to 5.1mn) 3.2 2.9 • Order frequency grew 2.3 by 13% YoY to 4.3 1.6 1.7 orders per quarter per active user Q1 Q2 Q3 Q4 Q1 Q2
Slide 43: Samokat orders and dark stores
• Samokat grew orders 4.2x YoY to 18.9mn including up • Samokat’s dark store base reached 758 in September (2.6x to 250,000 in daily orders in September YoY), being among the largest networks globally • Samokat launched operations across 2 new cities • The SKU base has further expanded (added cosmet
Slide 44: Local Kitchen orders and users
• In Q3 Local Kitchen grew total kitchens in • Active customer base grew to ~150k in September 2021 operation in Moscow to 50 vs. 33 in Q3 2020 (+1.4x YoY) • The company continues construction of new • Share of existing customers within a total active customer kitchens and experiments in low tempera
Slide 45: Citymobil rides and GMV
Citymobil GMV, Total Citymobil Rides B2B/Higher Class Rides Delivery rides RUB bn 2020 2019 Q3 2020 2021 +46% 2020 Q3 2021 2021 +17% +1.9x 44 +3.1x 30 +3.2x +9% -10% 13 15 Q3 9M Q3 9M B2B Higher Classes Q3 2020 Q3 2021 45 Source: Internal data
Slide 46: Citydrive fleet and rides
Total rides, mn Total fleet EOP, thousand +31% +47% 5.7 2.1 4.8 1.8 4.3 4.3 4.4 1.6 1.6 3.9 1.4 3.5 1.0 0.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2020 2020 2020 2021 2021 2021 2020 2020 2020 2020 2021 2021 2021 46 Source: Internal data
Slide 47: AliExpress GMV and orders
AliExpress total GMV 1, RUB bn AliExpress total orders, mn orders +36% +16% 133.3 139.3 119.8 97.7 H1 FY2021 H1 FY2022 H1 FY2021 H1 FY2022 +5.5x Local Local marketplace +126% marketplace GMV 2 growth orders growth H1 FY2021 H1 FY2022 H1 FY2021 H1 FY2022 Source: Internal data; Note: AliExpress Russia
Slide 48: AliExpress buyers and sellers
AliExpress total buyers 1, mn AliExpress seller base, thousands +62% +6% Cross-border 350.6 sellers 27.9 Russian 26.2 sellers 216.9 YoY growth 275.0 +45% 189.1 75.6 +172% 27.8 March 2021 September 2021 September 2020 September 2021 • AliExpress Russia focus in on converting the large cross- • AliExp
Slide 49: Additional information
Additional information Leverage. Headcount. _‘
Slide 50: Gross debt and net debt
Gross Debt, RUB bn 0.0x 0.0x 1.0x 2.4x 2.7x Gross Debt 75.8 63.9 incl. lease 15.8 liabilities / 15.2 LTM EBITDA 28.3 4.8 48.7 60.1 0.0 0.0 23.5 2017 2018 2019 2020 Q3 2021 Loans and Convertible Bonds Lease Liabilities Net (Cash) Debt including lease (0.7)x (0.4)x 0.6x 0.9x 1.6x liabilities, 45.0 RUB
Slide 51: Total headcount
• Headcount expanded by ~13% YTD (to 9,980 people), with Online Education accounting for >70% of net hires, given the segment’s intensive growth Total headcount, eop 9,980 8,842 6,277 5,667 4,419 1 2 3 Dec-2017 Dec-2018 Dec-2019 Dec-2020 Sep-2021 Source: Internal data; 1 Acquisition of ESforce, BitG
Slide 52: For further information please contact
For further information please contact: E-mail: ir@vk.company 52
Slide 53: Disclaimer
This presеntation has been prepared by Mail.ru Group Limited (the “Company”) and comprises the written materials for a presentation to syndicate research analysts or certain institutional investors. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking sta
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