HeadHunter Group PLC

Thank you. Hello everyone and welcome to Headhunter Group fourth quarter and full year 2020 earnings call. On the call today we have Mikhail Zhukov, our chief executive officer, Gregory Moiseev, our chief financial officer, and Dmitry Sergiyenko, our chief strategy officer. A press release containing our fourth quarter and full year 2020 results was issued earlier today and a copy may be obtained through our website at investor.hh.ru. Now I will briefly walk you through the safe harbor statements. Today's discussion will contain forward-looking statements. Actual results may differ materially from the results predicted or implied by such statements, and forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to publicly update or revise these statements. For a discussion of some of the risk factors that could cause actual results to differ, please see the risk factor section in our annual report on Form 20F for the year ended December 31, 2019, and our final prospectus in connection with our public offering that was filed with the U.S. Securities and Exchange Commission on June 16, 2020. During this call, we'll be referring to some non-IFRS financial measures. These non-IFRS financial measures are not prepared in accordance with IFRS. The reconciliation of the non-IFRS financial measures to the most directly comparable IFRS measures is provided in the earnings release we issued today and the slide presentations, each of which is available on our website at investor.hh.ru. Now, I'll turn the call over to Mikhail to make a quick opening remark. Please go ahead. Thank you, Roman.

Good afternoon, everyone. Last year, HackHunter celebrated its 20th anniversary. And without a doubt, there has not been a year like that before. COVID-19 pandemic has changed everybody's lives, adversely impacting some businesses and opening up new opportunities to the others. Our business emerged from this backdrop even stronger than ever been. The powerful network effect of our platform, reinforced by timely marketing and monetization steps during recovery, allowed us to further consolidate the market and significantly improve key operating metrics. In February 2021, the number of CVs on the platform reached a 50 million milestone and vacancy seats holding on a record level of above 800,000 job postings. Despite all the challenges, we have not only defended our leading market position, but also accelerated our development in certain key strategic areas through the acquisition of strong regional job platform zarplata.ru and introduction of new consumption partners into our product suite. Now we see life is slowly getting back to normal, which gives businesses more confidence and visibility. The competition for labor is intensifying in Russia, forcing employers to leverage the most effective channels of recruitment. All these factors, alongside accelerated digitalization, makes us to believe that 2021 will be a really exciting year for HeadHunter. Now I'll turn it to Dmitry to walk you through the key highlights of the fourth quarter and the full year. Thank you.

Thank you, Misha. Good afternoon, everyone, and thank you for joining us on this call. Let's do a quick overview of year-end results and, as usual, have enough time for Q&A. Looking backwards, 2020, by no stretch of imagination, can be called a dull year, as it turned out to be one of the most difficult but equally important years in company history. We once again demonstrated the resilience of our business and our ability to turn economic volatility in our favor. hence coming out of recession even stronger than ever. Our 2020 revenue went up by 6.3% year-on-year, with full recovery to pre-COVID revenue growth levels by end of fourth quarter. Despite overall challenging year, we progressed significantly along our monetization strategy, switching to a new subscription model, which will hopefully have a long-lasting effect on RPC growth. Our pre-COVID pricing differentiation initiatives became noticeable and made significant impact in Q4, facilitating overall revenue recovery. Throughout this year, we demonstrated safe financial discipline and ability to manage our cost base in line with our business performance. We retained 40% plus profitability in all quarters and eventually even managed to increase our annual EBITDA margin compared to 2019. On top of our guiding rules, we have carried out acquisition of strong online platform in the most untapped market segments, regional blue collars and SMA. In 2020, Zarplata generated revenue of $780 million, which is right on top of the range provided in November. Last year dynamics of our core operating metrics indicate the continuous product development and overall online recruitment market expansion in Russia, despite all the economic headwinds. During 2020, we added more than 6 million net new CVs, sustaining leadership in all Russian regions in terms of new candidate inflow and expanding the gap with competitors. More importantly, we maintain high share of active CVs, 70% of total visible CVs on our platform either applied or were updated over the last two years. So this database remains very relevant, and as we move to new access monetization, this becomes very crucial. Especially strong trends we see in blue-collar worker categories, where we have demonstrated a circle of 45% year-on-year CV growth. As of the end of 2020, 35% of all job seekers received from this category. This justifies our considerable traction in the blue-collar market. On the employer's side, we observed quite similar dynamics. As of the end of 2020, the total number of job posting on the platform was 25% up, supported by strong new customer inflow and consumption growth of existing clients. Similar to candidate content, blue-collar vacancies are growing especially strong. representing 43% of total vacancy feed. It's very important for us to strategically strike a right balance between demand and supply side in blue color, and therefore we're very pleased with such concurrent dynamic. Higher extend demand in terms of interview invitation remains strong during 2020, quarter four, and almost no seasonal decline, growing 80% year-on-year in December. Now, giving a little bit more specific about Q4 numbers. In the fourth quarter, our revenue growth came back to pre-pandemic levels, growing 90% year-on-year. Importantly, we see our revenue trends trending in January and February, despite a postponement of price increase from 1st January, as we usually do, to 1st April this year. Our adjusted EBITDA margin in the fourth quarter was level 47.4%, affected slightly by today's Zoom hiring and some discretionary bonuses paid to our employees in Q4. Our capex in Q4 2020 was only $48 million, or 2% of revenue, as we finally completed our office renovation. Our key product dynamics is also encouraging and generally consistent with the trends we've seen in the previous quarter. Being more sensitive to business environment, job posting demonstrated the strongest recovery dynamics in the first quarter, growing 32% year-on-year. Growth came back on came on the back of inflow of new customers, mostly small and medium businesses, as well as growth of key account consumption and effect of 2020 price increase, which became fully effective at the year-end. Bundled subscriptions proved to be less susceptible to short-term volatility due to predominance of long-term contracts. In Q4, this product category accelerated to 12% year-on-year. CV database growth accelerated to 9% year-on-year, which saw uplift in average duration by access and that actually contributes to visibility of our future revenues in this segment. We significantly advanced transition to a new paper contact model with the vast majority of key accounts already working and moved to a new scheme. We expect that migration will be substantially over this year, and we expect very meaningful revenue effects from 2020 onwards. You maintain a comfortable share of subscription revenue in our portfolio, approximately 47%, which helps us to withstand the periods of heightened volatility like we experienced last year. Other value-added services growth deceleration was affected by some offline events that were canceled last year for this reason. However, branding and price of performance products have shown soaring growth above 20% year-on-year. And in the end, our last category demonstrated revenue growth exceeding group average year-on-year. Turning now to results by customer segment. Despite the fact that this year we saw higher than usual return rate during lockdown, affecting SME segment especially hard, we have increased our paying client base by circa 30,000 customers. During Q4, all client categories demonstrated strong double-digit revenue growth, with SMA being mostly driven by customer base expansion, while key accounts both pricing initiatives and consumption growth in big packages. Our client acquisition planning executed in Q3 and Q4 facilitated new customer intake. During the fourth quarter, a number of new customer registrations grew by 50% year-on-year with record high conversions paying customers. We see an average revenue per customer growing across all client categories with very encouraging vintage dynamics. Clients from all categories acquired during 2019 increased their spending in 2020 by more than 70%. Those kind of customers who started using Headhunter before 2019 demonstrated RPC 20% growth on average. So that meaning we have been advancing longer our monetization strategy even in such a turbulent year. Now I'm handing it to Gregory to talk through our financial performance.