Vk International Public Js Com · RUS:VKCO
Vk International Public Js Com — Mail.ru Group — Q2 2021 Earnings Presentation
58 slides from Vk International Public Js Com's earnings presentation, 2021
Slide 1: Quarterly presentation Q2 2021
Quarterly presentation Q2 2021
Slide 2: Table of contents
Table of contents Overview……………………………………………………………………………………….............................. 3 Financial & segmental highlights……………………………………...………………………………. 4 Guidance……………………………………...……………………………………………………………………. 11 Advertising…………………………………………………………………………............................................ 13
Slide 3: Q2 2021 Overview
Q2 2021 Overview Revenue RUB bn • Strong performance of advertising revenue (+39% YoY), VK remains the growth +17% engine. Trends were particularly strong across performance formats, in-stream video advertising, SMBs 30.0 • MMO revenue contracted 6%YoY with the overall Games segment slightly 25.5 su
Slide 4: Financial & segmental highlights
Financial & segmental highlights 4
Slide 5: Revenue dynamics, RUB bn
Revenue dynamics, RUB bn 5 Source: Internal data
Slide 6: EBITDA dynamics, RUB bn
EBITDA dynamics, RUB bn 6 Source: Internal data
Slide 7: Communications and Social segment performance review
Communications and Social segment performance review Communications and Social Revenue, RUB bn Revenue growth drivers in Q2 2021: +15% • Acceleration of advertising revenue growth for the third 27.5 quarter in a row, with online advertising accounting for 24.0 +22% ~60% of segment’s revenues 11.6 14
Slide 8: Games segment performance review
Games segment performance review Revenue grew slightly in Q2 2021: Games Revenue, RUB bn +18% • Despite the highly challenging base effect, no new internal game launches and no significant acquisitions YTD, as well 22.1 +1% as IDFA related changes 18.7 • Rush Royale, launched in December 2020, as we
Slide 9: EdTech segment performance review
EdTech segment performance review EdTech Revenue, RUB bn Revenue growth drivers in Q2 2021: +129% +88% • Launch of 143 new courses and programs, to >1,000 in total 4.3 • Growth in the number of students. Cumulative number of paying 1.9 2.2 students approached 238,000, up 2.3x YoY, with nearly 31,000
Slide 10: New Initiatives segment performance review
New Initiatives segment performance review New Initiatives Revenue, RUB bn Revenue growth drivers in Q2 2021: +43% • Youla growth acceleration to 64% YoY 4.6 +51% • Recommendation systems (Pulse and Relap) saw 3.2 combined revenue more than double YoY 2.7 1.8 • B2B projects, including Cloud H1 2020
Slide 11: Consolidated Group guidance for 2021
Consolidated Group guidance for 2021 Group revenue ~RUB127-130bn Group EBITDA Improvement in margin YoY Community IVAS Revenue growth in 2021 Organic revenue growth, Games with YoY improvement in profitability ~RUB 3.6-3.9bn in revenues with progress towards Youla break-even (anticipated in 2022) Re
Slide 12: Main consolidated assets
Main consolidated assets 12
Slide 13: Advertising: simple tools for SMB
Advertising: simple tools for SMB SMB ad revenues Product updates • Update of ad platform for SMBs in VK Business +56% ✓ All simple tools in the unified interface ✓ Any SMB even without a page in VK may launch ads ✓ Promotion across MRG ecosystem New ad platform for SMBs in VK Business Q2 2019 Q2 20
Slide 14: Advertising: focus on performance ad formats
Advertising: focus on performance ad formats Performance ad revenues Product updates • Several enhancements in auto bidding, which maximizes the +69% efficiency and reduces requirements for manual campaign setup • Support of SkAdNetwork, which Apple introduced for attribution instead of IDFA Ad spen
Slide 15: Advertising: growing monetization of video ad inventory
Advertising: growing monetization of video ad inventory In-stream video ad revenues Product updates • Growing monetization, improved brand safety and visibility of video +84% ad inventory due to: ✓ Detailed segmentation of video ad inventory in VK and OK (by type, length, place) as a basis for furth
Slide 16: VK: solid leadership in audience reach
VK: solid leadership in audience reach VK maintains its leadership among domestic social networks, with average Russian MAU of VK Russia DAU, mn 72mn and DAU of 47mn (+1% YoY) in Q2 2021 • 65% of VK users are accessing the social network every day • VK reaches 47% of Russian internet users every day
Slide 17: VK: Super App product updates – Mini Apps
VK: Super App product updates – Mini Apps • VK continue to develop the VK Mini Apps platform and Active Mini Apps – Number of apps, thousands the Hub section. It contains all the key services and is +74% the main entry point to the VK Super App 34 • 15 mini apps have MAU in excess of 1mn (+15.3% 29.
Slide 18: VK: integration with Marusia voice assistant
VK: integration with Marusia voice assistant • VK has become the first social network to have a voice assistant added to its app • With Marusia, many VK services have become even more accessible and easy to use. For example, with one command, users can play their favorite song, podcast, find a user
Slide 19: VK Connect: active roll out continues
VK Connect: active roll out continues • VK Connect, the single sign-on platform for all Mail.ru Group Cumulative number of people using VK Connect for products formed on the basis of VK authentication, excluding authentication on vk.com, mn • Since its launch in June 2020 >40.7mn people used VK Conn
Slide 20: VK Donut and VK Pay
VK Donut and VK Pay VK continues to develop the VK Donut community content monetization platform and VK Pay payment solution • In 2021, VK introduced the ability to automatically create chats exclusively for donors in communities with VK Donut. 18% of communities enabled these chats within the featu
Slide 21: VK: further enhancements in video offering
VK: further enhancements in video offering • VK remains highly focused on enhancing its video offering, including through development of different types of video content, such as exclusive broadcasts of events • Daily video views (incl. VK Clips) reached >1bn in June with video MAU at 75mn • VK Clip
Slide 22: VK Video Calls
VK Video Calls • Administrators of communities can now choose whether to make calls as themselves or as the community • To make sure community calls aren’t intrusive, VK set up a special privacy setting. By default, users can only receive calls from communities they’re following. However, they can a
Slide 23: OK: social and entertainment platform
OK: social and entertainment platform • Russia average MAU in Q2 stood at 38mn • OK continued to focus on communication services: in Q2 users sent Number of stickers sent >482 mn stickers, 9.9 bn virtual gifts and 660 mn postcards. In H1 2021, OK doubled YoY the share of stickers among all messages
Slide 24: OK: Moments is seeing strong initial traction
OK: Moments is seeing strong initial traction Views Moments — service with disappearing photo and video continued to see strong traction: • Moments exceeded 25 mn MAU in Q2 (+2x YTD), with the number of views and reactions up 2.5x and 2.7x respectively YTD Apr-2021 Jan-2021 Jun-2021 May-2021 Feb-202
Slide 25: OK: product updates continue
OK: product updates continue Product updates continued in Q2: • In Q2 the team launched new unique competitive mechanics in Moments — thematic contests for users. Soon contests will be available to groups, brands and media in OK • OK supported the publication of “Moments” from VK Mini Apps. • Launch
Slide 26: OK: continuing development of SMB platform
OK: continuing development of SMB platform OK continues to focus on SMB platform development: • In Q2 OK provides a possibility for the legal entities to top up personal accounts in OK Ads Manager • Also OK rolled out a recommendation service for business profiles with the opportunity to gain profit
Slide 27: MY.GAMES: surpassing the Q2 2020 revenue hurdle
MY.GAMES: surpassing the Q2 2020 revenue hurdle • MY.GAMES revenue rose by 1% YoY in Q2 (to RUB 11.1bn) and accounted for 37% of Group’s revenues • International (ex Russia + CIS) gaming revenue share in Q2 2021 stood at 74% (vs 74% in Q2 2020) • Majority of MY.GAMES revenues (77%) came from mobile
Slide 28: MY.GAMES: top revenue generating products
MY.GAMES: top revenue generating products • Franchise titles (War Robots, Warface, Hustle Castle) remain TOP 10 revenue generating products in Q2 2021 the top-3 revenue generators, while the newly launched Rush Lifetime installs 2 Royale was the largest contributor into revenue growth Title (as of t
Slide 29: MY.GAMES: MAU and ARPU dynamics
MY.GAMES: MAU and ARPU dynamics • Average MAU stood at 21.4mn in Q2 1 Average number of paying users, mn 1 -15% • ARPU dynamics reflects multiple factors incl. changes in portfolio mix, 1.2 revenue splits by platforms and geographies, impact of new launches 1.1 1.0 1.0 1.0 and live-ops activities. I
Slide 30: MY.GAMES: main mobile titles
MY.GAMES: main mobile titles • At 77% of revenues in Q2, mobile remains the top business driver for MY.GAMES • Rush Royale (2020, IT Territory studio) reached ~9mn downloads since its launch in December with monthly revenue nearing RUB 400mn in June, which makes it one of the most successful launche
Slide 31: MY.GAMES: latest mobile highlights
MY.GAMES: latest mobile highlights Rush Royale updates Left to Survive updates Tacticool updates • Important big update adding clans • Alien Invasion Event and Zombie • Easter events followed by «Phoenix and clan wars gameplay plus Horde Event adding more content and tournament» hardcore championshi
Slide 32: MY.GAMES: latest PC and console highlights
MY.GAMES: latest PC and console highlights Blast Brigade updates Warface updates World War 3 updates • Announced in May 2021 by opening • Warface was launched on Epic • CBT on PC is planned later this year official Steam page and allowing to Games Store fulfilling strategy of add the game to the wis
Slide 33: EdTech: almost doubled revenue YoY in Q2
EdTech: almost doubled revenue YoY in Q2 • Skillbox and GeekBrains are the EdTech revenues*, RUB bn leading services on the growing market of online education in the segment of additional education for adults >9.0 • Platforms launched 143 new courses +3.1x and programs (professions and 6.1 faculties
Slide 34: EdTech: rapid expansion of product matrix and customer base
EdTech: rapid expansion of product matrix and customer base Cumulative number of registered Growing number of courses and professions and paid students, thousands* Skillbox products Q2 2021 vs. Q2 2021 GeekBrains products Registered +92% 662 Incremental increase Q2 2021 vs. Q2 2021 Paid +131% 562 97
Slide 35: Youla: steady growth and path to breakeven
Youla: steady growth and path to breakeven Youla Revenue, RUB bn Youla revenue and traffic growth 2017- 2021E +64% 0.9 Revenue, RUB bn MAU, mn 0.6 33 Q2 2020 Q2 2021 3.6-3.9 • Drivers: rising share of B2B sales 27 Youla EBITDA, RUB bn 24 -39% -20% EBITDA Margin, % 19 3.0 Q2 2020 Q2 2021 2.1 1.7 H1 2
Slide 36: Youla: steady growth and path to breakeven
Youla: steady growth and path to breakeven • Strong pipeline of cross-integrations and B2B to drive growth Generals, services & real estate: • Holds the largest share of classified revenue • Audience growth and monetization through development of VK Classifieds • Focus on Trust & Safety • B2B revenu
Slide 37: Youla: VK Classifieds and VK Work progress
Youla: VK Classifieds and VK Work progress VK Classifieds product launches: VK Work product launches: • «Vacancies exchange» with VK (possibility for job • VK Classifieds integration with posting via VK Work app directly to job related groups in local and thematic groups in VK VK): led to self servi
Slide 38: Joint Ventures O2O & AliExpress Russia
Joint Ventures O2O & AliExpress Russia 38
Slide 39: GMV of O2O JV grew 1.8x in Q2
GMV of O2O JV grew 1.8x in Q2 O2O GMV 1, RUB bn • O2O JV perimeter includes Delivery Club, r_keeper (former Foodplex), Citymobil, Citydrive (former Youdrive), Local Kitchen +1.8x and Samokat (the latter two businesses were consolidated in 2020) 45.1 • O2O GMV increased by 1.8x YoY to RUB 40.5 40.7 4
Slide 40: Delivery Club: market leader in terms of users
Delivery Club: ready-to-eat (RTE) food delivery market leader in terms of users… MAU is significantly above pre-COVID levels. Solid MAU performance is accompanied with increasing frequency of orders Monthly active users, mobile apps, mn 4.2 4.0 Delivery Club Yandex.Eda 3.9 3.9 3.7 3.6 3.6 3.5 3.5 3.
Slide 41: …and downloads
…and downloads Downloads, iOS and Android combined, thousands 1141 Delivery Club Yandex.Eda 754 717 670 631 602 559 527 506 526511542 487 446 444 366 355 364 378 335 351 343 316 309 292 274 286 250 363 197 318 149 45 16 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep
Slide 42: Delivery Club: ~1.4x YoY revenue growth in Q2
Delivery Club: ~1.4x YoY revenue growth in Q2 Revenue 3, RUB bn Geographic reach YoY Cities of presence, 1P 1 Overall geographic coverage 1, 3P+1P +1.4x Q2 149 208 2020 3.6 Q2 3.1 3.2 188 323 2021 2.5 2.6 1.8 Vendors on the platform 1.5 Number of vendors 2, thousands 1.2 0.9 0.9 Q2 2020 25.0 YoY +1.
Slide 43: Delivery Club: 1.3x YoY growth in orders, with 65% 1P share
Delivery Club: 1.3x YoY growth in orders, with 65% 1P share Total orders, mn 1P/3P orders split, % + 1.3x 3P 1P 35 44 41 41 41 49 47 47 57 66 77 82 80 79 82 82 96 92 20.8 18.0 17.6 16.1 15.3 10.8 9.2 7.6 5.4 5.4 4.1 2.8 3.0 3.0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2018 2018 2019 2019 2020
Slide 44: Delivery Club: Growing active users and frequency
Delivery Club: Growing active users and frequency The number of active users increased by 13% YoY in Q2 (to 4.9mn), with frequency up by 15% YoY in Q2, with historical maximum level of 4.3 orders per active user per quarter Active customers 1, mn Frequency2, # of orders 4.3 3.9 3.7 3.8 3.8 3.3 3.3 3
Slide 45: Samokat: 3.9x YoY revenue growth in Q2
Samokat: 3.9x YoY revenue growth in Q2 • Samokat express e-grocery platform approached 15.6 mn orders in Q2 (4.3x YoY) with up to 200,000 daily orders in June • Revenue grew 3.9x YoY in Q2 to RUB 8 bn, with the number of dark stores reaching 699 in June (3.3x YoY) • In Q2 Samokat entered12 new regio
Slide 46: Local Kitchen: 1.5x YoY revenue growth in Q2
Local Kitchen: 1.5x YoY revenue growth in Q2 Orders (thousands) and dark kitchens • In Q2 Local Kitchen operated 44 kitchens across Moscow vs. 32 in Q2 2020 45 44 • Revenue increased 1.5x YoY in Q2, with 1.7x 42 growth in orders to 1.7mn in Q2 2021. Daily orders of the top-performing kitchens amount
Slide 47: Local Kitchen: rising retention across cohorts
Local Kitchen: rising retention across cohorts • Active1 customer base reached ~133k Active users, thousands users in June 2021 (+1.6x YoY), with rising retention across cohorts New Customers • Share of existing customers within the Existing Customers 61 total active customer base in Q2 2021 68 97 g
Slide 48: Citymobil: 40% YoY growth in rides in Q2
Citymobil: 40% YoY growth in rides in Q2 Active growth continues B2B and Higher Classes are development priorities Citymobil rides by months Citymobil B2B & Higher Classes rides DiDi’s expansion & 2020 2021 Yandex pressure Q2 2020 Q2 2021 +5.3x +1.7x +1.4x +1.2x +3.4x April May June B2B Higher Class
Slide 49: Citymobil: progress in multimodal strategy
Сitymobil: progress in multimodal strategy The transformation started with a 360-degree Together with taxi, micromobility forms the basis of the rebranding future multimodal transport platform... Scooters rides by months 35К scooters across the Max >18K rides per country day MAU (Jun’21) > 180K +1.4
Slide 50: AliExpress Russia continues to scale with triple digit local growth in Q2
AliExpress Russia continues to scale with triple digit local growth in Q2 +249% Number of • Local marketplace GMV increased 2x YoY with local marketplace orders growing ~5x YoY reflecting the focus on local sellers, high frequency low AOV orders thousands • The number of local sellers exceeded 60,00
Slide 51: AliExpress Russia: ongoing transformation (1/2)
AliExpress Russia: ongoing transformation (1/2) AER continues to improve the level of service and value proposition for buyers and sellers, with some of the latest developments including: • Expansion of local offers via integration with Otto Group, Sadovod, Podruzhka among others and with rollout of
Slide 52: AliExpress Russia: ongoing transformation (2/2)
AliExpress Russia: ongoing transformation (2/2) • AER launched an affiliate AE Platform, helping media, bloggers, sites and individuals to monetize their AER traffic and earn commissions for orders done through their promotional links • AER started to open branded pick-up points across Russian Post
Slide 53: Additional information
Additional information Leverage. Headcount 53
Slide 54: Leverage
Leverage 0.0x 0.0x 1.0x 2.4x 2.3x Gross Debt, RUB bn 63.9 61.5 15.2 15.6 Gross Debt incl. lease 28.3 liabilities / 4.8 48.7 45.9 LTM EBITDA 0.0 0.0 23.5 2017 2018 2019 2020 Q2 2021 Loans and Convertible Bonds Lease Liabilities Net (Cash) Debt (0.7)x (0.4)x 0.6x 0.9x 1.4x including lease 37.7 liabili
Slide 55: Headcount
Headcount Headcount expanded by ~11% YTD (to 9,850 people), with Online Education accounting for >80% of net hires, given the segment’s intensive growth Total headcount, eop 9,850 8,842 6,277 5,667 4,419 1 2 3 Dec-2017 Dec-2018 Dec-2019 Dec-2020 Jun-2021 Source: Internal data; 1 Acquisition of ESfor
Slide 56: For further information please contact
For further information please contact: E-mail: ir@corp.mail.ru 56
Slide 57: 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 58: Mail.ru Group
@ mail.ru group