HeadHunter Group PLC

Thank you. Hello, everyone, and welcome to Headhunter Group first quarter 2021 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 first quarter 2021 results was issued earlier today, and a copy may be obtained through our website at investor.hh.ru. Now I will quickly 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 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, 2020. During this call, we will be referring to some non-IFRS financial measures. These non-IFRS financial measures are not prepared in accordance with IFRS. 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 presentation, each of which is available on our website at investor.hh.ru. Now I'll turn the call over to Mikhail for opening remarks. Please go ahead.

Thank you, Roman, and good afternoon, everyone. A year ago we were at the point of great uncertainty and couldn't imagine how much stronger our business would emerge from this crisis. So today we are especially happy to deliver a solid set of financial and operating results. Positive macro trends this year keep driving businesses' confidence up, resulting in ever-increasing competition for labor. this environment of short supply employers have to allocate budgets towards the most effective recruitment channels and that is why we see over 1 million active job vacancies on our platform right now recently we consolidated our ownership in HR tech company skills which we believe would result in further expansion of our business beyond job advertising finally As we have seen fundamental trends strengthening, we are significantly upgrading our growth guidance and also would like to reward our shareholders with 75% of the 2020 net profits to be paid in dividends. Now, I'll turn it to Dmitry to walk you through the key highlights of the first quarter.

Thanks, Mikhail. Good afternoon and thank you for joining us on this call. Overall, as Mikhail said, we are very happy to report an excellent set of results on Q1. Our revenue was up 43% year-on-year, even despite the relatively limited low-based effects set for the quarter last year. Growth rates accelerated significantly compared to Q4 across all client and product categories. Our adjusted EBITDA margin, including Zarplata, came at 47%, while our core business EBITDA margin, excluding Zarplata, reached 51%. Our CapEx comprised just 1.9% of revenues, thereby contributing to a strong cash flow generation over the quarter. Our key product dynamic is generally consistent with the previous quarter. Job posting demonstrated the strongest growth trend in the first quarter, growing 59% year-on-year. The growth came on the back of solid intake of new customers, predominantly small and medium businesses, as well as the 2020 differentiated monetization applied to key accounts. Bundled subscription and CV database access demonstrated solid revenue growth of 33% and 25%, respectively, mainly driven by small and medium business consumption growth. Even though over 90% of our clients already migrated to a new subscription monetization model, the impact on revenue at this stage is relatively small, and we expect it to gradually accelerate over the year as heavy users use up all their contacts included in the basic subscription and start consuming on a per-contact basis. Value-added services' outperformance is explained by strong growth in the usage of media ads and price-for-performance products, like Virtual Recruiter, both by key accounts and small and medium businesses. We managed to accelerate revenue growth across all client categories, as I said. Apart from rapid organic growth at Headhunter, in Q1, we added a big part of unique customers from Zarplata. Almost all of them were allocated into regional key accounts or small and medium businesses. Those customers who are not unique to Headhunter have significantly increased the combined average revenue per customer, almost doubling its growth in regional key accounts and small and medium business category. Cohort dynamics remain strong with small and medium businesses acquired during 2020, increasing their spend more than 100% in Q1 and key accounts by more than 60%. Our key account revenue increased by 31% in the first quarter of 2021 year-on-year. The growth is mainly attributable to the 18% RPC growth driven by both substantial enhancement in monetization and high consumption per customer. It's really nice to see very limited consumption adjustment despite all the monetization moves in the key account segment. Just give you a sense of our actual pricing power potential. Small and medium revenue increased by an impressive 56% in the first quarter, primarily due to the growth in number of clients. The share of SME revenue reached 62% versus 57% a year ago, Our business becomes more diverse, and online market penetration keeps on growing. Revenue in Moscow and St. Petersburg increased by 36%, while revenue from other regions of Russia went up by an impressive 65% year-on-year. In Q1, we reached a share of revenue generated outside of Moscow and St. Petersburg of 61%, compared to 56% a year ago. So we think these numbers provide evidence of great traction across strategic growth areas, as well as indicate the potential that is still ahead of us. Now, here's Gregory to talk about profitability and cash flow.