HHR - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by and welcome to the Second Quarter 2021 Financial Results Conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your first speaker today Arman Arutyunian. sir. ahead, go Please,

Arman Arutyunian

welcome Group and earnings quarter call. to everyone, second HeadHunter XXXX Hello,

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

Actual forward-looking will results would we to you contain like today. the forward-looking to no discussion predicted to such statements. today We differ Before implied we begin, statements. obligation of only publicly results may that remind expectations from statements materially by today's or as update speak these undertake our or statements. made And revise

of could Annual our ended the of factors please December risk differ, to XX, discussion for cause results on the a Risk section that see XXXX. year Form XX-F For some Factors actual Report in the

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

Now, I’d like to turn the call over ahead. to Mikhail. Please, go

Mikhail Zhukov

intake of fundamental customers. our business. corporate market. by historical Halfway and I'm dramatic number vacancies increasingly XXXX, the Driven current us trends, optimistic currently through new record Hi, strength platform evidenced Arman. This today. for the of Thanks on by in the Thanks, our joining everyone. we highest of activity about is seeing market are

Along excited our to monetization ground our exceeded customer expansion, the new I'm half improve also of future users pricing result, for completed for product our first quarter. migration and about XXX,XXX. the base the in us set a allowing to its second in customer paying enhancement. have we base model subscriptions, XXXX of total with development As the

of way millions For and digital people instant example, to important we between communication released messengers functionality and Chats an of users candidates are increasingly becoming consume various and direct products. and in-platform our employers.

So we're are integrating example, this for used across order advertise crucial cross their their in an posting we our launched labor And our broadly here succeed interfaces. as on clients in steps options outreach. into extending candidate thereby to clients market broad recruitment these All to focusing situation. to help vacancies their challenging platform,

over it Dmitry walk Thank quarter. turn you. me second key let to to highlights Now through you the

Dmitry Sergienkov

afternoon. good us Thank for you this and Mikhail on you, call. joining Thank

we revenues, said, across Mikhail of second As product are year, revenue above report medium new for and a full profitability very strategic came diluting accelerated the significantly cash to generation priorities. over CapEx EBITDA delivering consolidation flow just consumption to year-on-year, the comprised up of effect we businesses, was Skillaz consolidation, adjusted of driven rollout with by QX our in some monetization that our XXX% base, margin our improved strong contributing momentum accelerated over acquired. average continued assets as XX%, all our Again in from small X.X% Despite and and quarter. to little growth, comparison happy business last gain quarter, intake newly strong

circa over XXXX. entire yet clients guiding have base segment; pre-COVID Turning our increased XXX,XXX of growth and by customers the our and of first the we half already our customer a of we than now to by customer have results acquisition result XXXX, as more Zarplata,

from while both customer this ARPC segments and growth, categories almost mostly organic During the strong revenue St. second revenue. by Petersburg all growth quarter, Revenue XXX% inorganic, key total nearly year-on-year, [indiscernible]. being other regions triple-digit in grow, up year-over-year, share target now went explained and reaching by base region Moscow in our business XX% by with revenue demonstrated Russia small medium is be of also will while segments client account and expansion, increased by XXX% reported driven

we're soaring nearly capitalizing tremendous on growth, of by total account supply. consumption consumption on growth job pricing seeing year-on-year were product XX% and posting demand growth and posting circa and In and segments equal XXX% categories medium in circa In unprecedently labor explained for dynamics, growth segment, job small the while terms contributors. labor key high of

and XXX% key Our access subscriptions and respectively. bundle database XX% year-on-year demonstrated growth

completed see increase is actually quarter, revenue in of And segment original our subscription we of explained contacts, clients model. we account by to purchase our a expectations. key of circa transition DB additional This that CV new XX% exceeding

revenue our overall, numbers, of as XX%, top the we growth the historical arguably recent robust terms history. with long-term strong bookings leading best such performance, of decided in to in quarter range this Having coupled to XX% full year-on-year. was and indicators, on a year line So packaged official upgrade basis very purchases, guidance it our vacancy subscription significantly

Of its now in measures recovery half. major in course, continued resumes restrictive second economy the trend and

and to financial our metrics. our Now, profitability Grigorii about here's talk other

Grigorii Moiseev

and you, everyone. Dmitry Thank hello,

expenses you me margins Let give some detail and on our first.

of in basis. our EBITDA even almost percentage Skillaz mostly circa due points. consolidated has increase compared X our Consolidation in the XXXX. diluted the the business Zarplata This margin said, than increased XXXX, organic adjusted EBITDA of XX% steeper revenue. to margin adjusted increase and on XX.X% the to segments quarter in second margin our in second to by Therefore, improvement of Dmitry in was As the quarter was

costs three to operating second Our growth. XXXX. expenses increased by were factors XX% the in this and quarter of key There

added about the of Skillaz, we one-third explains expenses growth. First, which Zarplata and of

of increased to as COVID base quite of in expenses XXXX And effect, were marketing the on our third, back Second, a the budget. low low related savings. was our XXXX second and expenses cost in wages, our there and accordance headcount, quarter we

key Let me the buckets. expense briefly discuss

the which addition this in was growth Skillaz bucket. Zarplata Our here expenses, personnel expenses low driven the The by total the by second of and was to growth the increased of The XX%, cost base. personnel XXXX. latest one-third circa also compared of driver quarter explains

us of And induction program circa our savings wages the XX cost second in XXXX increased XX% of XXX not half in bonuses the X% they by quarter sales and the of quarter and back by Rubles bonuses Rubles performance the support, headcount on last in and customer we teams while of Zarplata were all and sales targets; the consolidation, sales quarter and XXXX XX Our based about or million the saved the million performance bonuses. in second -- XXXX for of our has in second XX performance teams, sales team’s increased Skillaz circa low. second people Also, XXXX based development internal of finally, primarily circa performance the quarter our by these XX% in months, XXXX. quite including by circa also increased over second in

revenue, or As from quarter in other points, the quarter excluding compensations share-based X by to mostly have a and XX.X% in personnel of due XX.X% of in second the percentage items revenue. expenses, to increase second percentage XXXX decreased of XXXX the

base budgets, was our by the was cost year. marketing channels year-on-year. Zarplata accordance also mostly various Moving consolidation The on to due growth driven our a expenses, of last increased for effect our by savings growth expense in while was marketing across our and annual of with they expansion moderate XX% one-third low there approximately to

revenue. As quite our last the from second second in to XXXX quarter in mostly a percentage year of due circa X X.X% or also percentage sizably quarter in decreased increase to expense XX.X% the marketing of the revenue, again, by of points;

quarter and year. million the here of and again other other the growth Our second Rubles base were by increase the program Zarplata the compared on quarter general COVID-related increase expenses the the quarter administrative and the of of XXX.X% last Key cost sales was of low the other of And addition factors SPO-related savings this services XX second to in in of effect in back bucket. year, contributed in Skillaz one-third which revenues the XXXX. expenses the driver the the in second approximately from increased of value-added the of cost XXXX,

other second percentage quarter of non-operational Margins a account by base while were significant compared explained yet achieved of increase, into market administrative XXXX revenue the flat taking of general unstable second for the and in a adjusted X.X% at expenses, cost quarter second revenue, quarter, are level, XXXX. to the As in environment. in the being items conservative various XX% somewhat

So don't XX% these think sustainable and the over down trend short term we high in to margins expect year. the plus rate are towards them

infrastructure indicators, CapEx the mainly increase of key in XXXX server quarter XX the due million of our in on quarter to million on back in user to compared was second investments increasing traffic. this and and XX of other Rubles the XXXX our second to Moving was

the in revenue of X% about was quarter. CapEx said, Dmitry As second

compared Our billion, tax Rubles net second expense and to XX, in June over we of million six X.X revenue This increase XX, XXXX. the of months. as was quarter XXX XX increase the driven customer in working the consecutive the due was second to million compared received the in was X.X to quarter of XXXX in increase primarily taxable as by capital negative The last profit. negative XXXX. XXXX, December advances of Income change was billion

XX.X%, Our the in second rate compared quarter effective tax relatively of quarter flat was XXXX. in the XX.X second to

quarter XXXX. activities XXX acquisition to XXX financial interest billion days. used quarter This cash of million Rubles year million Skillaz. the generated the in used to the of in consideration We the timing to bank increase compared activities XXX generation metrics, to quarter was XX loan used million to million last XXX investment X.X the paid in in repayments primarily We sales. used of was periods due COVID of second for non-working in second of related the by in growth Rubles The was ownership driven increase turning Rubles million to due XXXX. quarter second to Now The XXXX, year. operating of we from additional decrease compared in mainly second XX% due last compared activities mostly in

X of XXXX, billion in from operating net cash of XXXX Rubles increase X.X December primarily balances to billion due XX, as to Our activities. decreased the debt as June XX, from

end XXXX, and plan programs July quarter compared included July long-term net increased a established the to EBITDA units new incentive to Unit model in talent. in to Option debt-to-adjusted provide XXXX back competitive stock our the the dividend to leverage compared to this, as net debt XXXX July the XX, settled circa a X.X in increase more XXXX the end, Plan June and net billion key Unit On in Prior announced for measures. And motivation XXXX restricted decrease finally, times our Post Therefore, adjusted management X.X EBITDA ratio we of EBITDA, the and our XXXX, Option of X of of period we the Plan. as to XXXX. adjusted earlier adjusted in XX, Rubles. times debt year December EBITDA decreased

XXXX. under our on be The the granted in new time. fully on management the of sales period plan, RSU Our XXXX talent. shares personnel Board coverage XXXX and is from number on and that key be total motivate our of to the management Plan grant granted We questions. X% years, top based better Directors new date. the subject XXXX to marketing concludes development, teams. be criteria. Each our new the XXXX. years new the vest commencing we Thank awards Plan Option the of wide and and to of are four the retain be is with the provided approval for The May treasures the focused will are quarter will be certain Plan Option four and issued by This over others, of with RSU our of outstanding to of awards our and time second now our issued RSU awards legacy will among now replaced through recommendation and period opening and presentation be results plan reasonably the outstanding until the of Part August each individual shares RSU floor expected the will under Plan will awards able mostly for under your of believe It level. attract, The selection we in key product, you. Compensation Committee, its reward transfer grant upon Vesting will maximum

Operator

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

line open. now Your is

Vyacheslav Degtyarev

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

reflected from looking the how you would can new on assess firstly, the more upside And price share reflected results as the So second last to will medium-term Are Skillaz you the Thank monetization full stake further. your and to regards how XXX% thoughts qualitatively this the April be increase were quarter or in looks is it question as quarters? ultimately? the yet of much you like the year plans? it ownership steps second any technical, do is well price And the next the considering increases you more coming you the the August monetization in with year? not you. for in increases Are

Dmitry Sergienkov

Vyacheslav. answer here. to Sergienkov Hi, I'll your try questions.

we transition our of the new results because are model. first very implementation with of The on the of the monetization, subscription one the monetization pleased

quite be and is quite So this all the as the spike, already yeah, that without actually kind any And, next you on year, new was revenue you'll impact see models. result can actually churn, smoothly we've this observing etc. to significant. and the executed the clients moved monetization same it in quarters At of results time, in

there believe ideas. of various Looking actually explore -- a can areas, kind we we of and really lot forward, monetization our that of huge is opportunity course, a

So longer contact price giving for actually to we every level. the clients actual we'll remind we to you, year, we closer sell it. kind we of to monetization six be for target. realized year, model, per are term the are To try plan to -- Rubles target This the contact, the migrate get we move contact new to our as

over end of, so [ph] to we'll We're the realized on in of at is Rubles, by year that and to clients. course getting payroll data kind the kind price actual then of of structure infrastructure place technologically, and kind get moment, XX number. to we'll the closer Now we -- XX further of are this willingness inflate the to match focused very try the

be So focusing will we regional will on focus differentiation. on we --

price Moscow differentiate moment, of all, other that. the regions, uniformity of lot because there's First in from at a

time, and upside from are at attention by flexible that also that. not this kind tariffs and significant see also see by to of we differentiation will role enough, We pay of profession point a

we I'll say was quite terms right, before moderate, then actually April In announced new were because the also on implemented impact, of initiatives major the model. and growth monetization subscription COVID

didn't April more, any somewhat Yeah, make I it's will changes right, throughout I quarter. already So the we be the quarters, one-off as the major that throughout the will year, plan of to course say of kind pricing, this therefore kind quite a in of actually seeing are kind of right, kind evenly you some because has impact not the affected year, in event. April of, of call the spread tariffs But wouldn't particular second year.

liquidity. the stake in certain very at last the Skillaz, business In from control. terms success yeah, additional acquisition business. kind the And towards who of company it significant separate of so, successfully it had gesture extend time, riding act the remained founder, fully good of At the over a this he he to motivated the XX% been this again, five of the in is and the is same years, long-term transaction was

also of term, is invested it's in involved much XXX% possible. fully seeing game, Maybe not ultimate interested we we're very but and the of definitely. kind consolidation it for being kind of So of kind in shorter end him

Vyacheslav Degtyarev

Okay, thank you very much.

Operator

next the of question And Xtellus. your you. comes Kim the ask Ivan from Thank from question. Please line

line now is Your open.

Ivan Kim

Yes, please. afternoon. questions good Two me, for

just fairly next longer regarding for term demand, high high Firstly, base growth, year. a on that's the

And revenue, maintain to XX%, question this are marketing second vis-à-vis in the growth we're profitability basically, marketing has second more very driven that fairly be spend, ‘XX? by let's would normal, you absolute on kind the on XX% the the not terms for And to of in say, my you're What of it's will your is been spend, marketing sort So competitors company or you So confident much. but definitely expect you revenue able so spend wondering, How and very the competition? just business? to responding half? course it this of modest the quarter. is Thank

Dmitry Sergienkov

I will Ivan. Thanks, the one. first answer

a it's bit little growth, I think the premature. On

and affecting next believe also year, But comps next they sectors new for growth line, at sustainable. have part is same acquisitions are the time, we two unsustainable, growth are definitely will subscription so discussing time have having definitely revenue quite significantly some model. for right, year example, year, And think, today's the there the favorable still I we Now, certain are of at last we right, impact and monetization that same our be quarters. but

guidance new That's mentioned, [ph] we We expect because at on be have first then And planning this moment level there'll bigger spend. but to year initiatives. monetization quite to at marketing least sensible. preferred significant of revenue impact therefore been [ph] to customer full can that growth the year two has now, hand And see that situation sustain times moment, looks growth, we I'll effect. than our the as There'll as And at just the it next you not growth is be expect. a comment And year, next the of unfolding. year, it we thing. we it believe good this Grigorii on

Grigorii Moiseev

This Ivan. is Hi, Dm. thanks, Grigorii. Yeah,

So we of of expected little on to down a as in profitability, half the year. second the the I kind said, trend

course, continue unknown into high is QX high what well, job first QX and the will QX would number demand whether right. revenue Of as trajectory or the into of postings be,

QX. we well, side, to be impact, the just half autumn, year be. busy expect typically would about and in for full revenue terms results on which of Zarplata the probably do was what on it we were quite X% P&L, increase unsure as in recruitment. conservative the dilutive be fully of in we as now marketing spend, favorable for instance, into just consolidate kind estimate Also Secondly, being of first our we investments now performance is because year sides right, it as somewhat the the on to Skillaz, in season We're full which cost of year, will this heading the have a they

to of basically up revenue no conservative, we saw then kind looking all better severe where was COVID-related And than as performing said, X% the about be the second second wise, lockdowns for the of can to marketing, have factors, these or the will occurring So Percentage I in of given provided XX% revenue think in full course on kind you year. maybe scenario we margin forward it I we're think year, etc EBITDA of if that more in conservative half. half QX. in adjusted increase

it to -- year, of of – XX, about XX% XX think closer the we and will as kind I in maybe revenue, last be XX maybe XXXX. saw

will something like XXXX I well, think we in as a see that bit little maybe less.

how marketing the for of I it brand investment from is kind it's can the entirely that driven, positive of performance We see just both competition effect wise. awareness and still based. wouldn't say in kind As

here kind as we are we level some in well. as responding revenue, instance, targeting So to are of as instances, of marketing for percentage But competition well.

think it kind of based I second brands pretty and online year, including marketing will awareness much as the in of and performance half well. the be in every offline increase channel,

Ivan Kim

Great. answers. detailed the Thank much you for very

Operator

the line And Please question Dmitry of your the comes from next you. Thank question. Vlasov ask from WOOD.

now is line Your open.

Dmitry Vlasov

for Hi. And questions. opportunity ask to Thank impressive on results. very you much the congrats

you quarter consolidation the how whether Thank dynamics, would maybe you. improved would are of labor market and on of and labor question is see early acquired be, your could first the trends came So how growth, be And politics trends the accelerating? some like on August much break even assets? could changing revenue you market this my provide like market your comments question. and business if performance positive my from That performing, second base or overall some if would my you into second July color be growth first question this revenue overall effect, growth, down

Dmitry Sergienkov

Thanks, here. Dmitry. It is Dima

Okay.

our sustainable course, sustainable, course. revenue So, less the the quarter worth of factors decomposing second like in in – of

attributed XX to estimate we low it from and percentage to Our is attributable made, points actually last base acquisitions around the circa points that XX are and percentage effects year Zarplata Skillaz. just

in called It's of for out like kind be business still can could you and mentioned, coming already, point like you or factors major can we see XX%, the the XX% scale, Zhukov also of and one-fourth that to of already take business of XX%, effectively, XX% XXX kind remains growth kind on the driven that three years existing this monetization by relates kind quite are of of ample ours. fundamentals. as XX%, that getting here. said those decompose phenomenal underlying that And I So percentage in opportunities

of So opens exceptional of the shift it for monetization. up event, a to new monetization opportunities scheme lot further kind but was

ideas we that [indiscernible] this. already a I So operations to monetization have of lot answered

quite or part deceleration we impact this expect of robust, is and kind So this. a any diminishing don't from

average actually consumption client. per is factor Another

key consume a we moment, So medium they at circa accounts or consume XXX% more. see that and historically, businesses more XX% small the almost than of did and

the average. effect normal; So life heck have but fade stabilize actually moving on market as where movement we again see area people the improves. some their rational actually generally when to this they get and may we to start that most can may temporary people consumption believe of extent, can kind entirely, We doubled the of not away, labor

of probably intake And the this to major kind that So is part COVID explains call and in online circumstances. customers. digitalization XX% And unsustainable of what we of transactions XX back and highest the fragment. of where encompasses half this more digitalization. that kind -- of on get growth, and more the acceleration is the And is circa involved attributable new companies this

the actually growth. drives we debt and the So our accelerates this is believe fundamental trajectory, what long-term

around So, pretty improved to what on-boarding last not as hard experience gave accelerated replicate always come actually with growth. That of be was great That gave to us could But the is remaining total belongs our also such effect. it year, up significantly a X% interface that is digitalization. improvements. immediate we or client impressive

strong. they of trends, In very terms remain

with and import that's consumption monetization, we still the we July, and still of if all kind is you required this that our that just stable similar think in and see believe competitors market kind well we reasons pretty accelerating the in quarter-to-date, are of not accelerate upgraded supply think of market one candidates. we of why broadly guidance from challenges tough. very environment, that up of see held I the pretty these we even fundamental X face UCDs. And shortage our million and look, did And factors we

in that So so gain until likely delivery. we share resulted [ph] most we sustain can candidate market delivery level

So, the market remains don't this be to expect We tough. Difficulty]. [Technical

Operator

Difficulty] Please question. ask from [Technical Alfa-Bank. your

is line open. Your now

Anna Kurbatova

Yes, thank numbers. very with have two also you and much great congratulation I questions.

all, to and your most so know, buyback. And where elaborate of check? First plan like region a the budgets or demand by you you categories now, industries approach to you future or on what of where see the less, well, you maybe the more, the growth? potential profession? that bit performing are So don't are RSU speech will could bit a pricing? on by are more could in points you price or question mentioned the have differentiation most I your in average do like some more tell second So considering professions Now your be opportunities, or such what the Yes. more,

share your you is yes, both and to few tell will there of a it you shares plan issue by buyback, X%, be us that So, equal of allotment. funded that and number new

it's of program bit be So And you buyback? more techniques. much backed the plan buyback if buyback more provide techniques, RSU how on could a information, by possible will

period? you. your buying I during from markets will XX to shares do correctly months next like the So, understand that the time Thank be time from you

Dmitry Sergienkov

It Thanks, again. Dmitry is Anna.

this not professional, knowledge intensive the candidates supply that price various of angles you And actual up actually station, some we circle, should of the can responds how are blue well as our just pricing, by even think, certain is where see attractive. differentiate fully area and of labor having being is opportunity, this actually I foresee high there potential we anyhow of and kind firsts. labor vertical, but in the for the skilled really this the it they pricing balance is we market, us just we the market, right, of pricing such right, collar huge should What kind in a white the quite that On at of businesses. look actually tied hand, the for oversupply of course, dynamic other because salary. biggest kind pricing not on end professions professionals, in there's moment, bound reduction differentiate. so and and certain we color our of to the reflect is the only of for importance in to logic, actual and and low believe the kind kind and the price kind actual market, which have not growing there But thing may a to And where is value

of it's think -- the important you're we price end or product, most not paying I you a goal in the just engineer, that same IT moment, growing So will fair. it that's the professionals be probably kind highest demand. see for whether think area and would also, That's another career and really because, at the

In service. into company, re-engineering we're role entirely our going to are and the terms impact, at the entrench deeply we that actually the quite of our moment in catalogue

this as That's it I tariffs. opportunities, just we kind of question. first on it think yeah, will we second, we year, of fully get have brand kind we to our the And a starting end QX of differentiation should Grigorii. professional So start will catalog, implemented which kind new for give this by we the see be from will differentiation. this next and points of year, kind launch of the experiments will ground finding and And

Grigorii Moiseev

hi, thanks, Dima. Yeah, Yeah, Anna.

reiterate remains these over the over of the expiring but so be kind RSU over four period years, We period. immediately, right. going deferred that when expect not in it's in So I to of awards August we to And valid. XXXX. program just It this quite were is this to wanted granted time, actually plan, grant new this these again, size is of X% awards,

Specifically, I we of about three year, the -- in in think grant would XX% next in this XX% or the years. total remaining program this

existing ready diluting when is we yes, At of indication what I'm the kind buyback, volumes not the going shareholders. the of primary fund specific any buyback. purpose the to program for you give without and incentives or to on to As this point, share-based are

you months As should of the X%. program to average, statutory day XX% for It framework. five limitation. the than the it by kind of more is is Well price and exceed the not maximum buyback be average, results of assumes saw, equity back. kind That's the XX bought

of So we'll do on buyback we'll any occasionally as accordingly said you decide kind soon kind market, from purchases as the specific as inform the of we and tranche.

we the with, XXXX useful shares issue about the plan. purchased this in as probably RSU XXX,XXX year the issue maybe Just be -- we might And part from to new an the will next it's our indication size, will some market we, next all in right, and year, will estimate option and plan year. be under buyback we of shares have

Anna Kurbatova

Thanks. much very Thank very you clear.

Operator

Thank you. They're no further questions. Please continue.

Arman Arutyunian

the bye. Thanks joining Bye, for call. a lot

Dmitry Sergienkov

Thank bye. you. Bye,

Grigorii Moiseev

Bye. Thanks.

Operator

Thank conference you. today. concludes This our you Thank for participating. for

now all You may disconnect.

HeadHunter (HHR) 16 Aug 212021 Q2 Earnings call transcript