6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF A FOREIGN ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For September 1, 2015

 

 

QIWI plc

 

 

12-14 Kennedy Ave.

Kennedy Business Centre, 2nd Floor, Office 203

1087 Nicosia Cyprus

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x            Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨            No   x

If ‘‘Yes’’ is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

EXHIBIT 99.1 TO THIS REPORT ON FORM 6-K IS INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-190918), FORM F-3 (FILE NO. 333-204728) AND FORM F-3 (FILE NO. 333-205489) OF QIWI PLC AND IN THE OUTSTANDING PROSPECTUSES CONTAINED IN SUCH REGISTRATION STATEMENTS.

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    QIWI PLC (Registrant)
Date: September 1, 2015     By:  

/s/ Alexander Karavaev

      Alexander Karavaev
      Chief Financial Officer


Exhibits

99.1     “QIWI Announces Second Quarter 2015 Results” press release dated September 1, 2015

EX-99.1

Exhibit 99.1

 

LOGO

QIWI ANNOUNCES SECOND QUARTER 2015 RESULTS

Second-Quarter Total Adjusted Net Revenue Increases 20% to RUB 2,525 Million

Adjusted Net Profit Increases 9% to RUB 1,033 Million or RUB 18.40 per diluted share

QIWI reviews 2015 Guidance

NICOSIA, CYPRUS - September 1, 2015 – QIWI plc, (NASDAQ: QIWI) (“QIWI” or the “Company”) today announced results for the second quarter ended June 30, 2015.

Second-Quarter 2015 Operating and Financial Highlights

 

    Total Adjusted Net Revenue increased 20% to RUB 2,525 million ($45.5 million)

 

    Adjusted EBITDA increased 13% to RUB 1,483 million ($26.7 million)

 

    Adjusted Net Profit increased 9% to RUB 1,033 million ($18.6 million), or RUB 18.40 per diluted share

 

    Total payment volume increased 31% to RUB 204.2 billion ($3.7 billion)

“I am very pleased to share these solid results of our consolidated business,” said Sergey Solonin, QIWI’s chief executive officer. “Despite the continuing macroeconomic slowdown we continued to deliver strong financial and operational results. I am particularly happy with the addition to the business of Contact and Rapida, which are already bringing synergies to the group and strengthening our positions in the rapidly changing payments environment. We continue to see plenty of opportunities ahead, especially in gaining market share in the key verticals, which will be the key focus for the company in the near term.”

Second-Quarter 2015 Results

Revenues: Total Adjusted Net Revenue for the quarter ended June 30, 2015 was RUB 2,525 million ($45.5 million), an increase of 20% compared with RUB 2,112 million in the prior year.

Payment Adjusted Net Revenue was RUB 1,876 million ($33.8 million), an increase of 20% compared with RUB 1,562 million in the prior year. Payment Adjusted Net Revenue growth was predominantly driven by an increase in payment volume across all verticals, especially the E-commerce and Money Remittances market verticals, that was in turn partially offset by the declining net revenue yields primarily as a result of the acquisition and consolidation of Contact and Rapida which operate on significantly lower net revenue yields than QIWI standalone.

Other Adjusted Net Revenue, which is principally composed of revenue from inactivity fees, interest revenue and gain from currency swaps and overdrafts provided to agents, revenue from rent of space for kiosks and sale of kiosks, cash and settlement services and advertising, was RUB 649 million ($11.7 million), an increase of 18% compared with RUB 550 million in the prior year. The growth in the second- quarter was mainly due to the increase in interest revenue from deposits and overdrafts provided to agents, slightly offset by our continuing investment in improving clients’ service, such as call center costs.


Adjusted EBITDA: For the quarter ended June 30, 2015, Adjusted EBITDA was RUB 1,483 million ($26.7 million), an increase of 13% compared with RUB 1,318 million in the prior year. Adjusted EBITDA growth was mainly driven by revenue growth partially offset by the 26% growth of SG&A cost including: advertising and marketing, bad debt expense, payroll, office maintenance costs (mainly driven by increase in automation expenses, and old equipment replacement) and other consulting and legal fees resulting from the ongoing internal controls improvements together with M&A activities, in particular the recent acquisition of Contact and Rapida. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of Total Adjusted Net Revenue) was 58.7% compared with 62.4% in the prior year.

Adjusted Net Profit: For the quarter ended June 30, 2015, Adjusted Net Profit was RUB 1,033 million ($18.6 million), an increase of 9% compared with RUB 951 million in the prior year. The increase in Adjusted Net Profit was primarily driven by the same factors impacting Adjusted EBITDA, though pressured by the increase in depreciation and amortization expenses by RUB 76 million as compared to the second quarter 2014 to RUB 157 million as a result of purchase of additional fixed assets (mostly processing servers and engineering equipment) and intangible assets (mostly licenses and computer software) for security and business development purposes in the fourth quarter 2014.

Other Operating Data: For the quarter ended June 30, 2015, total payment volume was RUB 204.2 billion ($3.7 billion), an increase of 31% compared with RUB 156.3 billion in the prior year. Payment volume increased across all verticals partially driven by acquisition and consolidation of Contact and Rapida businesses as well as organic growth in E-commerce and Money Remittance market verticals. Average payment net revenue yield was 0.92%, a decrease of 8 bps compared with 1.00% in the prior period primarily due to the consolidation of lower yielding Contact and Rapida businesses.

The total average Net Revenue Yield was 1.24%, a decrease of 11 bps as compared with 1.35% in the prior year.

The number of active kiosks and terminals was 176,831, an increase of 3% compared with the prior year. The number of active Visa Qiwi Wallet accounts was 17.0 million in the second-quarter 2015, an increase of 1.2 million, or 7%, as compared with 15.8 million in the second-quarter 2014.

Recent Developments

Dividend: QIWI continues to pursue different M&A opportunities and considers the timing and current market conditions to favor this strategy. We plan to refrain from paying dividends for the next few quarters with the objective to return to our historical dividend distribution practice once this window closes.

Acquisition of Contact and Rapida: On May 14th, 2015 we announced the acquisition of 100% ownership in the Contact money transfer system and the Rapida payment processing system from Otkritie financial corporation. The deal was structured as a two-stage process within which we acquired 70% of interest in Contact and Rapida on June 2nd, 2015 with the deal on the remaining 30% closed on June 30th, 2015. Starting June 1st 2015 we consolidate financial results of the above mentioned companies in our financial statements which are presented in the Annex below.


2015 Guidance1

QIWI reviews its guidance in respect of 2015 outlook:

 

    Total Adjusted Net Revenue is expected to increase by 18% to 22% over 2014

 

    Adjusted Net Profit is expected to increase by 18% to 22% over 2014

We have started to note the effects of the macroeconomic slowdown in Russia in the second half of 2014 and especially in Q4, which we believe can be long lasting and could have a significant negative effect on both consumer spending and the banking system in Russia and, accordingly, on our business. The extent of the slowdown, and if that were to result in a full scale banking crisis and long-term deterioration of consumer confidence, is yet to be assessed.

Further, we see several risks that can affect the stability and profitability of our offline distribution business. Firstly, the overall macroeconomic conditions adversely affect the purchasing power of Russian population as high inflation combined with decreasing real wage put pressure on the disposable income, thus leading to the overall decrease in consumer spending and in turn our payment volumes. Secondly, the Agents’ economics is being pressured by decreasing commissions (including and most significantly MNOs) and higher customer commission sensitivity combined with high rental and other costs.

Moreover, the Central Bank of Russia has been recently taking steps to secure the quality and transparency of agents industry, thus imposing some additional controls and monitoring requirements on agents through the banks. As agents have to comply with more requirements and handle significantly increasing numbers of inquiries from the banks that they work with, additional pressure is put on the agents’ business model especially for smaller players. Our network of agents is well diversified and we are committed to making our best effort to support our agents and mitigate potential negative effects of the abovementioned market conditions on their economic stability however, at the moment we don’t have the visibility to estimate the potential negative impact of these changes in the mid-term.

We provide the 2015 guidance based on our current understanding of the overall situation, which is subject to change. We reserve the right to revisit our 2015 guidance in case we see the situation changing throughout the year.

Expected growth of Adjusted Net Profit equals to the expected growth of Adjusted Net Revenue as a consequence of our desire and commitment to invest into new products and gain market share in 2015.

Earnings Conference Call and Audio Webcast

QIWI will host a conference call to discuss second-quarter 2015 financial results today at 8:30 a.m. ET. Hosting the call will be Sergey Solonin, chief executive officer, and Alexander Karavaev, chief financial officer. The conference call can be accessed live over the phone by dialing +1 (877) 407-3982 or for international callers by dialing +1 (201) 493-6780. A replay will be available at 11:30 a.m. ET and can be accessed by dialing +1 (877) 870-5176 or +1 (858) 384-5517 for international callers; the pin number is 13618218. The replay will be available until Tuesday, September 8, 2015. The call will be webcast live from the Company’s website at https://www.qiwi.ru under the Corporate Investor Relations section or directly at http://investor.qiwi.com/.

 

1  Guidance is provided in Russian rubles and includes consolidated financial result of Contact and Rapida since June 1st, 2015


About QIWI plc.

QIWI is a leading provider of next generation payment services in Russia and the CIS. It has an integrated proprietary network that enables payment services across physical, online and mobile channels. It has deployed over 17.0 million virtual wallets, over 176,000 kiosks and terminals, and enabled merchants to accept over RUB 50 billion cash and electronic payments monthly from c. 70 million consumers using its network at least once a month. QIWI’s consumers can use cash, stored value and other electronic payment methods to order and pay for goods and services across physical or online environments interchangeably.


Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995, including, without limitation, expected total adjusted net revenue, adjusted net profit and net revenue yield, dividend payments, payment volume growth, and growth of physical and virtual distribution channels. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of QIWI plc. to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to, the achievement of the expected benefits of the acquisition of Contact and Rapida, risks associated with the integration of Contact and Rapida, a decline in average net revenue yield, fees levied on QIWI’s consumers, regulation, QIWI’s ability to grow physical and virtual distribution channels, QIWI’s ability to expand geographically and other risks identified under the Caption “Risk Factors” in QIWI’s Annual Report on Form 20-F and in other reports QIWI files with the U.S. Securities and Exchange Commission. QIWI undertakes no obligation to revise any forward-looking statements or to report future events that may affect such forward-looking statements unless QIWI is required to do so by law.

Contact

 

Yakov Barinskiy

Head of M&A and Investor Relations

+7.499.709.0192

ir@qiwi.com

  

Varvara Kiseleva

Investor Relations

+7.499.709.0192

ir@qiwi.com

  


QIWI plc.

Consolidated Statement of Financial Position

(in thousands)

 

     As of December 31,
2014
    As of June 30,
2015 (unaudited)
     As of June 30,
2015 (unaudited)
 
     RUB     RUB      USD(1)  

Assets

       

Non-current assets

       

Property and equipment

     379,943        397,711         7,163   

Goodwill and other intangible assets

     2,367,623        12,661,067         228,029   

Long-term debt instruments

     1,806,295        2,807,412         50,562   

Long-term loans

     52,648        40,829         735   

Other non-current assets

     42,455        53,636         966   

Deferred tax assets

     239,571        232,517         4,188   
  

 

 

   

 

 

    

 

 

 

Total non-current assets

     4,888,535        16,193,172         291,643   
  

 

 

   

 

 

    

 

 

 

Current assets

       

Trade and other receivables

     5,305,275        4,217,716         75,962   

Short-term loans

     31,588        43,343         781   

Short-term debt instruments

     2,132,887        42,940         773   

Prepaid income tax

     89,239        100,206         1,805   

VAT and other taxes receivable

     51,078        37,941         683   

Cash and cash equivalents

     17,079,965        15,032,176         270,733   

Other current assets

     345,688        563,735         10,153   
  

 

 

   

 

 

    

 

 

 

Total current assets

     25,035,720        20,038,057         360,890   
  

 

 

   

 

 

    

 

 

 

Assets of disposal group classified as held for sale

     125,867        —           —     
  

 

 

   

 

 

    

 

 

 

Total assets

     30,050,122        36,231,229         652,533   
  

 

 

   

 

 

    

 

 

 

Equity and liabilities

       

Equity attributable to equity holders of the parent

       

Share capital

     963        1,135         20   

Additional paid-in capital

     1,876,104        1,876,104         33,789   

Share premium

     3,044,303        12,068,267         217,352   

Other reserve

     764,243        798,762         14,386   

Retained earnings

     2,683,805        3,929,532         70,772   

Translation reserve

     204,337        247,591         4,459   
  

 

 

   

 

 

    

 

 

 

Total equity attributable to equity holders of the parent

     8,573,755        18,921,391         340,779   

Non-controlling interest

     (239,385     5,382         97   
  

 

 

   

 

 

    

 

 

 

Total equity

     8,334,370        18,926,773         340,876   
  

 

 

   

 

 

    

 

 

 

Non-current liabilities

       

Long-term borrowings

     41,981        —           —     

Long-term deferred revenue

     8,394        4,732         85   

Long-term accounts payable

     987        733         13   

Deferred tax liabilities

     37,758        1,120,239         20,176   
  

 

 

   

 

 

    

 

 

 

Total non-current liabilities

     89,120        1,125,704         20,274   
  

 

 

   

 

 

    

 

 

 

Current liabilities

       

Short-term borrowings

     1,061        993,892         17,900   

Trade and other payables

     20,179,673        13,761,315         247,844   

Amounts due to customers and amounts due to banks

     1,001,286        1,041,162         18,752   

Income tax payable

     11,290        248,475         4,475   

VAT and other taxes payable

     127,733        108,293         1,950   

Deferred revenue

     52,008        20,731         373   

Other current liabilities

     56        4,884         88   
  

 

 

   

 

 

    

 

 

 

Total current liabilities

     21,373,107        16,178,752         291,383   
  

 

 

   

 

 

    

 

 

 

Liabilities directly associated with the assets of a disposal

     253,525        —           —     

group classified as held for sale

       
  

 

 

   

 

 

    

 

 

 

Total equity and liabilities

     30,050,122        36,231,229         652,533   
  

 

 

   

 

 

    

 

 

 

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in thousands, except per share data)

 

     Three months ended (unaudited)  
     June 30, 2014     June 30, 2015     June 30, 2015  
     RUB     RUB     USD(1)  

Revenue

     3,488,438        4,196,933        75,588   

Operating costs and expenses:

      

Cost of revenue (exclusive of depreciation and amortization)

     1,746,565        1,946,230        35,052   

Selling general and administrative expenses

     628,464        793,030        14,283   

Depreciation and amortization

     80,583        156,600        2,820   

Profit from operations

     1,032,826        1,301,073        23,433   
  

 

 

   

 

 

   

 

 

 

Gain from disposal of subsidiaries

     —          32,595        587   

Other income

     35,664        2,887        52   

Other expenses

     (3,487     (9,550     (172

Foreign exchange gain

     152,641        106,389        1,916   

Foreign exchange loss

     (249,051     (405,026     (7,295

Share of loss of associates

     (3,808     —          —     

Interest income

     —          1,114        20   

Interest expense

     (10,439     (27,543     (496
  

 

 

   

 

 

   

 

 

 

Profit before tax

     954,346        1,001,939        18,045   

Income tax expense

     (238,510     (258,819     (4,661
  

 

 

   

 

 

   

 

 

 

Net profit

     715,836        743,120        13,384   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     727,540        632,256        11,387   

Non-controlling interests

     (11,704     110,864        1,997   

Other comprehensive income

      

Exchange differences on translation of foreign operations

      

Differences arising during the year

     (473     (18,242     (329

Accumulated exchange differences reclassified to earnings upon disposal of foreign operations

     —          56,107        1,010   
  

 

 

   

 

 

   

 

 

 

Total comprehensive income net of tax

     715,363        780,985        14,066   
  

 

 

   

 

 

   

 

 

 

attributable to:

      

Equity holders of the parent

     720,005        639,180        11,512   

Non-controlling interests

     (4,642     141,805        2,554   

Earnings per share:

      

Basic profit attributable to ordinary equity holders of the parent

     13.88        11.32        0.20   

Diluted profit attributable to ordinary equity holders of the parent

     13.66        11.25        0.20   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in thousands, except per share data)

 

     Six months ended (unaudited)  
     June 30, 2014     June 30, 2015     June 30, 2015  
     RUB     RUB     USD(1)  

Revenue

     6,747,900        8,168,409        147,115   

Operating costs and expenses:

      

Cost of revenue (exclusive of depreciation and amortization)

     3,434,698        3,686,246        66,390   

Selling general and administrative expenses

     1,210,652        1,445,233        26,029   

Depreciation and amortization

     164,877        258,730        4,660   

Profit from operations

     1,937,673        2,778,200        50,036   
  

 

 

   

 

 

   

 

 

 

Gain from disposal of subsidiaries

     —          32,595        587   

Other income

     36,039        7,882        142   

Other expenses

     (8,493     (10,709     (193

Foreign exchange gain

     42,905        383,565        6,908   

Foreign exchange loss

     (141,368     (578,468     (10,418

Share of loss of associates

     (11,119     —          —     

Impairment of investment in associates

     (2,903     —          —     

Interest income

     712        1,670        30   

Interest expense

     (21,011     (40,874     (736
  

 

 

   

 

 

   

 

 

 

Profit before tax

     1,832,435        2,573,861        46,356   

Income tax expense

     (428,422     (552,029     (9,942
  

 

 

   

 

 

   

 

 

 

Net profit

     1,404,013        2,021,832        36,414   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     1,431,875        1,940,392        34,947   

Non-controlling interests

     (27,862     81,440        1,467   

Other comprehensive income

      

Exchange differences on translation of foreign operations

      

Differences arising during the year

     (3,485     14,940        269   

Accumulated exchange differences reclassified to earnings upon disposal of foreign operations

     —          56,107        1,010   
  

 

 

   

 

 

   

 

 

 

Total comprehensive income net of tax

     1,400,528        2,092,879        37,693   
  

 

 

   

 

 

   

 

 

 

attributable to:

      

Equity holders of the parent

     1,430,128        1,983,646        35,726   

Non-controlling interests

     (29,600     109,233        1,967   

Earnings per share:

      

Basic profit attributable to ordinary equity holders of the parent

     27.38        35.15        0.63   

Diluted profit attributable to ordinary equity holders of the parent

     26.94        34.94        0.63   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.


QIWI plc.

Consolidated Statement of Cash Flows

(in thousands)

 

     Six months ended (unaudited)  
     June 30, 2014     June 30, 2015     June 30, 2015  
     RUB     RUB     USD(1)  

Cash flows from operating activities

      

Profit before tax

     1,832,435        2,573,861        46,356   
  

 

 

   

 

 

   

 

 

 

Adjustments to reconcile profit before income tax to net cash flow used in operating activities

      

Depreciation and amortization

     164,877        258,730        4,660   

Foreign exchange loss, net

     98,463        194,903        3,510   

Interest income, net

     (142,633     (345,417     (6,221

Bad debt expense/(recovery), net

     84,951        (16,745     (302

Share of loss of associates

     11,119        —          —     

Impairment of investment in associates

     2,903        —          —     

Share-based payments

     239,280        46,454        837   

Gain from disposal of subsidiaries

     —          (32,595     (587

Other

     5,504        (9,261     (167
  

 

 

   

 

 

   

 

 

 

Operating profit before changes in working capital

     2,296,899        2,669,930        48,086   
  

 

 

   

 

 

   

 

 

 

Decrease in trade and other receivables

     955,305        3,503,999        63,108   

(Increase)/decrease in other assets

     (166,158     19,115        344   

(Increase)/decrease in amounts due to customers and amounts due to banks

     90,185        (792,942     (14,281

Decrease in accounts payable and accruals

     (5,304,276     (10,421,141     (187,687

Loans issued/(settled) from banking operations

     (12,534     7,434        134   
  

 

 

   

 

 

   

 

 

 

Cash used in operations

     (2,140,579     (5,013,605     (90,296
  

 

 

   

 

 

   

 

 

 

Interest received

     196,787        409,068        7,367   

Interest paid

     (14,627     (28,008     (504

Income tax paid

     (425,104     (390,075     (7,025
  

 

 

   

 

 

   

 

 

 

Net cash flow used in operating activities

     (2,383,523     (5,022,620     (90,459
  

 

 

   

 

 

   

 

 

 

Cash flows generated form investing activities

      

Cash acquired upon business combination

     —          3,200,275        57,638   

Contribution to associates without change in ownership

     (14,022     —          —     

Payment for assignment of loans

     (45,375     —          —     

Purchase of available-for-sale investments

     —          (5,628     (101

Purchase of property and equipment

     (196,646     (54,056     (974

Purchase of intangible assets

     (15,438     (82,677     (1,489

Net cash outflow on disposal of subsidiaries

     —          (16,206     (292

Loans issued

     (12,441     (36,972     (666

Repayment of loans issued

     866        —          —     

Purchase of debt instruments

     (706,846     (981,847     (17,683

Proceeds from settlement of debt instruments

     1,242,313        2,045,478        36,840   
  

 

 

   

 

 

   

 

 

 

Net cash flow generated from investing activities

     252,411        4,068,367        73,272   
  

 

 

   

 

 

   

 

 

 

Cash flows generated from/(used in) financing activities

      

Issue of share capital

     2,646,432        —          —     

Exercise of options

     5,167        —          —     

Proceeds from borrowings

     29,408        53,670        967   

Repayment of borrowings

     (1,389     (259,251     (4,669

Dividends paid to owners of the Group

     (1,105,939     (698,912     (12,588

Dividends paid to non-controlling shareholders

     (2,170     —          —     

Transactions with non-controlling interest

     1,783        —          —     

Net cash flow generated from/(used in) financing activities

     1,573,292        (904,493     (16,290
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (101,206     (203,863     (3,672
  

 

 

   

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (659,026     (2,062,609     (37,148
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the beginning of the period

     11,636,913        17,094,785        307,881   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     10,977,887        15,032,176        270,733   
  

 

 

   

 

 

   

 

 

 

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.


Non-IFRS Financial Measures and Supplemental Financial Information

This release presents Total Adjusted Net Revenue, Payment Adjusted Net Revenue, Other Adjusted Net Revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Profit and Adjusted Net Profit per share, which are non-IFRS financial measures. You should not consider these non-IFRS financial measures as substitutes for or superior to revenue, in the case of Total Adjusted Net Revenue, Payment Adjusted Net Revenue and Other Adjusted Net Revenue; Net Profit, in the case of Adjusted EBITDA; and Adjusted Net Profit, or earnings per share, in the case of Adjusted Net Profit per share, each prepared in accordance with IFRS. Furthermore, because these non-IFRS financial measures are not determined in accordance with IFRS, they are susceptible to varying calculations and may not be comparable to other similarly titled measures presented by other companies. QIWI encourages investors and others to review our financial information in its entirety and not rely on a single financial measure. For more information regarding Total Adjusted Net Revenue, Payment Adjusted Net Revenue, Other Adjusted Net Revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Profit, and Adjusted Net Profit per share, including a quantitative reconciliation of Total Adjusted Net Revenue, Payment Adjusted Net Revenue, Other Adjusted Net Revenue, Adjusted EBITDA and Adjusted Net Profit to the most directly comparable IFRS financial performance measure, which is revenue in the case of Total Adjusted Net Revenue, payment revenue in the case of Payment Adjusted Net Revenue, other revenue in the case of Other Adjusted Net Revenue and net profit in the case of Adjusted EBITDA and Adjusted Net Profit, see Reconciliation of IFRS to Non-IFRS Operating Results in this earnings release.

Payment Adjusted Net Revenue is the Adjusted Net Revenue consisting of the merchant and consumer fees collected for the payment transactions. E-commerce payment adjusted net revenue consists of fees charged to customers and merchants that buy and sell products and services online, including online games, social networks, online stores, game developers, software producers, coupon websites, tickets and numerous other merchants. Financial Services payment adjusted net revenue primarily consists of fees charged for payments accepted on behalf of our bank partners and microfinance companies. Money Remittances payment adjusted net revenue primarily consists of fees charged for transferring funds via money remittance companies. Telecom payment adjusted net revenue primarily consists of fees charged for payments to MNOs, internet services providers and pay television providers. Other payment adjusted net revenue consists of consumer and merchant fees charged for a variety of payments including multi-level-marketing, utility bills, government payments, education services and many others. Other Adjusted Net Revenue is principally composed of revenue from inactivity fees, interest revenue and gain from currency swaps and overdrafts provided to agents, revenue from rent of space for kiosks and sale of kiosks, cash and settlement services and advertising.


QIWI plc.

Reconciliation of IFRS to Non-IFRS Operating Results

(in millions, except per share data)

 

     Three months ended (unaudited)  
     June 30, 2014*     June 30, 2015     June 30, 2015  
     RUB     RUB     USD(2)  

Revenue

     3,488        4,197        75.6   

Minus: Cost of revenue (exclusive of depreciation and amortization)

     1,747        1,946        35.1   

Plus: Compensation to employees and related taxes

     370        275        4.9   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     2,112        2,525        45.5   
  

 

 

   

 

 

   

 

 

 

Payment Revenue(2)

     2,804        3,232        58.2   

Minus: Cost of payment revenue (exclusive of depreciation and amortization)(3)

     1,539        1,568        28.2   

Plus: Compensation to employees and related taxes allocated to payment revenue(4)

     297        212        3.8   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     1,562        1,876        33.8   
  

 

 

   

 

 

   

 

 

 

Other Revenue(5)

     685        965        17.4   

Minus: Cost of other revenue (exclusive of depreciation and amortization)(6)

     208        378        6.8   

Plus: Compensation to employees and related taxes allocated to other revenue(4)

     73        63        1.1   
  

 

 

   

 

 

   

 

 

 

Other Adjusted Net Revenue

     550        649        11.7   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     1,562        1,876        33.8   

E-commerce

     451        677        12.2   

Financial services

     468        404        7.3   

Money remittances

     240        411        7.4   

Telecom

     310        261        4.7   

Other

     92        123        2.2   

Other Adjusted Net Revenue

     550        649        11.7   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     2,112        2,525        45.5   
  

 

 

   

 

 

   

 

 

 

Net Profit

     716        743        13.4   
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     81        157        2.8   

Other income

     (3     (3     (0.1

Other expenses

     3        10        0.2   

Foreign exchange gain

     (153     (106     (1.9

Foreign exchange loss

     249        405        7.3   

Share of loss of associates

     4        —          —     

Interest income

     —          (1     (0.0

Interest expenses

     10        28        0.5   

Income tax expenses

     239        259        4.7   

Offering expenses

     45        —          —     

Income from depositary(7)

     (33     —          —     

Share-based payments expenses

     160        26        0.5   

Gain from disposal of subsidiaries

     —          (33     (0.6
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     1,318        1,483        26.7   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     62.4     58.7     58.7

Net profit

     716        743        13.4   

Amortization of fair value adjustments

     13        44        0.8   

Offering expenses

     45        —          —     

Income from depositary

     (33     —          —     

Share-based payments expenses

     160        26        0.5   

Effect of taxation of the above items

     (3     (8     (0.1

Gain from disposal of subsidiaries

     —          (33     (0.6

Foreign Exchange gain on June 2014 offering proceeds(8)

     52        261        4.7   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit(9)

     951        1,033        18.6   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     18.13        18.50        0.33   

Diluted

     17.85        18.40        0.33   

Shares used in computing Adjusted Net Profit per share

      

Basic

     52,425        55,849        55,849   

Diluted

     53,253        56,177        56,177   


 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.
(2) Payment revenue primarily consists of the merchant and consumer fees charged for the payment transactions.
(3) Cost of payment revenue (exclusive of depreciation and amortization) primarily consists of transaction costs to acquire payments from our customers payable to agents, mobile operators, international payment systems and other parties.
(4) The Company does not record the compensation to employees and related taxes within cost of revenue separately for payment revenue and other revenue, therefore it has been allocated between payment revenue and other revenue in proportion to the relevant revenue amounts for the purposes of the reconciliation presented above.
(5) Other revenue is principally composed of revenue from inactivity fees, interest revenue and gain from currency swaps and overdrafts provided to agents, revenue from rent of space for kiosks and sale of kiosks, cash and settlement services and advertising.
(6) Cost of other revenue (exclusive of depreciation and amortization) primarily consists of direct costs associated with other revenue and other costs, including but not limited to: compensation to employees and related taxes allocated to other revenue, costs of call-centers and advertising commissions.
(7) Income from depositary is presented in the separate line in reconciliation tables for convenience purposes, while it is included in other income in financial statements.
(8) Net effect of foreign exchange gains and losses on June 2014 SPO funds as presented in the reconciliation of Net Profit to Adjusted Net Profit differs from the Foreign exchange loss/(gain), net in the reconciliation of Net Profit to Adjusted EBITDA as the latter includes all the foreign exchange losses/(gains) for the period, while the former only include the foreign exchange gain on the SPO US dollar denominated funds.
* The amounts shown here do not correspond to the financial statements for three and six months ended June 30, 2014 and included additional reconciling items to conform to current period presentation.


QIWI plc.

Reconciliation of IFRS to Non-IFRS Operating Results

(in millions, except per share data)

 

    Six months ended  
    June 30, 2014*     June 30, 2015     June 30, 2015  
    RUB     RUB     USD(1)  

Revenue

    6,748        8,168        147.1   

Minus: Cost of revenue (exclusive of depreciation and amortization)

    3,435        3,686        66.4   

Plus: Compensation to employees and related taxes

    676        558        10.0   
 

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

    3,989        5,040        90.8   
 

 

 

   

 

 

   

 

 

 

Payment Revenue(2)

    5,432        6,244        112.5   

Minus: Cost of payment revenue (exclusive of depreciation and amortization)(3)

    3,052        2,955        53.2   

Plus: Compensation to employees and related taxes allocated to payment revenue(4)

    544        426        7.7   
 

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

    2,924        3,716        66.9   
 

 

 

   

 

 

   

 

 

 

Other Revenue(5)

    1,316        1,925        34.7   

Minus: Cost of other revenue (exclusive of depreciation and amortization)(6)

    383        732        13.2   

Plus: Compensation to employees and related taxes allocated to other revenue(4)

    132        132        2.4   
 

 

 

   

 

 

   

 

 

 

Other Adjusted Net Revenue

    1,065        1,324        23.9   
 

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

    2,924        3,716        66.9   

E-commerce

    831        1,411        25.4   

Financial services

    844        801        14.4   

Money remittances

    425        732        13.2   

Telecom

    623        506        9.1   

Other

    203        265        4.8   

Other Adjusted Net Revenue

    1,065        1,324        23.9   
 

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

    3,989        5,040        90.8   
 

 

 

   

 

 

   

 

 

 

Net Profit

    1,404        2,022        36.4   
 

 

 

   

 

 

   

 

 

 

Plus:

     

Depreciation and amortization

    165        259        4.7   

Other income

    (3     (8     (0.1

Other expenses

    8        11        0.2   

Foreign exchange gain

    (43     (384     (6.9

Foreign exchange loss

    141        578        10.4   

Share of loss of associates

    11        —          —     

Impairment of investment in associates

    3        —          —     

Interest income

    (1     (2     (0.0

Interest expenses

    21        41        0.7   

Income tax expenses

    428        552        9.9   

Offering expenses

    45        —          —     

Income from depositary(7)

    (33     —          —     

Share-based payments expenses

    239        46        0.8   

Gain from disposal of subsidiaries

    —          (33     (0.6
 

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    2,385        3,083        55.5   
 

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

    59.8     61.2     61.2

Net profit

    1,404        2,022        36.4   

Amortization of fair value adjustments

    35        60        1.1   

Offering expenses

    45        —          —     

Income from depositary

    (33     —          —     

Share-based payments expenses

    239        46        0.8   

Effect of taxation of the above items

    (7     (11     (0.2

Gain from disposal of subsidiaries

    —          (33     (0.6

Foreign Exchange gain on June 2014 offering proceeds(8)

    52        65        1.2   
 

 

 

   

 

 

   

 

 

 

Adjusted Net Profit(9)

    1,735        2,150        38.7   
 

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

     

Basic

    33.18        38.96        0.70   

Diluted

    32.65        38.73        0.70   

Shares used in computing Adjusted Net Profit per share

     

Basic

    52,302        55,200        55,200   

Diluted

    53,141        55,531        55,531   


 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.
(2) Payment revenue primarily consists of the merchant and consumer fees charged for the payment transactions.
(3) Cost of payment revenue (exclusive of depreciation and amortization) primarily consists of transaction costs to acquire payments from our customers payable to agents, mobile operators, international payment systems and other parties.
(4) The Company does not record the compensation to employees and related taxes within cost of revenue separately for payment revenue and other revenue, therefore it has been allocated between payment revenue and other revenue in proportion to the relevant revenue amounts for the purposes of the reconciliation presented above.
(5) Other revenue is principally composed of revenue from inactivity fees, interest revenue and gain from currency swaps and overdrafts provided to agents, revenue from rent of space for kiosks and sale of kiosks, cash and settlement services and advertising.
(6) Cost of other revenue (exclusive of depreciation and amortization) primarily consists of direct costs associated with other revenue and other costs, including but not limited to: compensation to employees and related taxes allocated to other revenue, costs of call-centers and advertising commissions.
(7) Income from depositary is presented in the separate line in reconciliation tables for convenience purposes, while it is included in other income in financial statements.
(8) Net effect of foreign exchange gains and losses on June 2014 SPO funds as presented in the reconciliation of Net Profit to Adjusted Net Profit differs from the Foreign exchange loss/(gain), net in the reconciliation of Net Profit to Adjusted EBITDA as the latter includes all the foreign exchange losses/(gains) for the period, while the former only include the foreign exchange gain on the SPO US dollar denominated funds.
* The amounts shown here do not correspond to the financial statements for three and six months ended June 30, 2014 and included additional reconciling items to conform to current period presentation.


QIWI plc.

Other Operating Data

 

     Three months ended  
     June 30, 2014     June 30, 2015     June 30, 2015  
     RUB     RUB     USD(1)  

Payment volume (billion)(2)(3)

     156.3        204.2        3.7   
  

 

 

   

 

 

   

 

 

 

E-commerce

     17.8        27.3        0.5   

Financial services

     48.4        54.2        1.0   

Money remittances

     15.3        35.3        0.6   

Telecom

     62.5        66.1        1.2   

Other

     12.3        21.4        0.4   
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(4)

     1,561.6        1,876.1        33.8   
  

 

 

   

 

 

   

 

 

 

E-commerce

     450.9        677.2        12.2   

Financial services

     468.3        403.6        7.3   

Money remittances

     240.3        411.1        7.4   

Telecom

     310.3        261.3        4.7   

Other

     91.8        122.8        2.2   
  

 

 

   

 

 

   

 

 

 

Payment average net revenue yield

     1.00     0.92     0.92
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.53     2.48     2.48

Financial services

     0.97     0.74     0.74

Money remittances

     1.57     1.16     1.16

Telecom

     0.50     0.40     0.40

Other

     0.75     0.58     0.58
  

 

 

   

 

 

   

 

 

 

Total average Net Revenue Yield

     1.35     1.24     1.24

Active kiosks and terminals (units)(5)

     171,043        176,831        176,831   

Active Qiwi Wallet accounts(6)

     15.8        17.0        17.0   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.
(2) Payment volume by market verticals and consolidated payment volume consist of the amounts paid by our customers to merchants included in each of those market verticals less intra-group eliminations. The methodology of payment volumes allocation between different market verticals in QIWI’s international operations (including Kazakhstan) may differ from the methodology used by QIWI’s Russian operations. We therefore retain the right to restate the presented volumes, net revenues and net revenue yields data in case the methodology of QIWI’s international operations will be brought in conformity with the methodology of QIWI’s Russian operations.
(3) Payment volume by market verticals and consolidated payment volume consist of the amounts paid by our customers to merchants included in each of those market verticals less intra-group eliminations. The methodology of payment volumes allocation between different market verticals in Contact and Rapida may differ from the methodology used by QIWI. We therefore retain the right to restate the presented volumes, net revenues and net revenue yields data in case the methodology of Contact and Rapida will be brought in conformity with the methodology used by QIWI.
(4) Payment Adjusted Net Revenue is calculated as the difference between Payment Gross Revenue and Payment Costs. Payment Gross Revenue primarily consists of merchant and consumer fees. Payment Costs primarily consist of commission to agents.
(5) We measure the numbers of our kiosks and terminals on a daily basis, with only those kiosks and terminals being taken into calculation through which at least one payment has been processed during the day, which we refer to as active kiosks and terminals. The period end numbers of our kiosks and terminals are calculated as an average of the amount of active kiosks and terminals for the last 30 days of the respective reporting period.
(6) Active Visa Qiwi Wallet accounts calculated on a yearly basis, i.e. an active account is an account that had at least one transaction within the last 12 months from the reporting date.


QIWI plc.

Other Operating Data

 

     Six months ended  
     June 30, 2014     June 30, 2015     June 30, 2015  
     RUB     RUB     USD(1)  

Payment volume (billion)(2)(3)

     305.9        362.7        6.5   
  

 

 

   

 

 

   

 

 

 

E-commerce

     35.3        48.0        0.9   

Financial services

     95.7        89.0        1.6   

Money remittances

     28.5        54.2        1.0   

Telecom

     121.0        127.0        2.3   

Other

     25.5        44.4        0.8   
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(4)

     2,923.9        3,715.6        66.9   
  

 

 

   

 

 

   

 

 

 

E-commerce

     830.6        1,411.1        25.4   

Financial services

     843.7        800.7        14.4   

Money remittances

     424.5        732.4        13.2   

Telecom

     622.6        506.4        9.1   

Other

     202.6        264.9        4.8   
  

 

 

   

 

 

   

 

 

 

Payment average net revenue yield

     0.96     1.02     1.02
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.36     2.94     2.94

Financial services

     0.88     0.90     0.90

Money remittances

     1.49     1.35     1.35

Telecom

     0.51     0.40     0.40

Other

     0.79     0.60     0.60
  

 

 

   

 

 

   

 

 

 

Total average Net Revenue Yield

     1.30     1.39     1.39

Active kiosks and terminals (units)(5)

     171,043        176,831        176,831   

Active Qiwi Wallet accounts(6)

     15.8        17.0        17.0   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 55.524 to U.S. $1.00, which the official exchange rate was quoted by the Central Bank of the Russian Federation as of June 30, 2015.
(2) Payment volume by market verticals and consolidated payment volume consist of the amounts paid by our customers to merchants included in each of those market verticals less intra-group eliminations. The methodology of payment volumes allocation between different market verticals in QIWI’s international operations (including Kazakhstan) may differ from the methodology used by QIWI’s Russian operations. We therefore retain the right to restate the presented volumes, net revenues and net revenue yields data in case the methodology of QIWI’s international operations will be brought in conformity with the methodology of QIWI’s Russian operations.
(3) Payment volume by market verticals and consolidated payment volume consist of the amounts paid by our customers to merchants included in each of those market verticals less intra-group eliminations. The methodology of payment volumes allocation between different market verticals in Contact and Rapida may differ from the methodology used by QIWI. We therefore retain the right to restate the presented volumes, net revenues and net revenue yields data in case the methodology of Contact and Rapida will be brought in conformity with the methodology used by QIWI.
(4) Payment Adjusted Net Revenue is calculated as the difference between Payment Gross Revenue and Payment Costs. Payment Gross Revenue primarily consists of merchant and consumer fees. Payment Costs primarily consist of commission to agents.
(5) We measure the numbers of our kiosks and terminals on a daily basis, with only those kiosks and terminals being taken into calculation through which at least one payment has been processed during the day, which we refer to as active kiosks and terminals. The period end numbers of our kiosks and terminals are calculated as an average of the amount of active kiosks and terminals for the last 30 days of the respective reporting period.
(6) Active Visa Qiwi Wallet accounts calculated on a yearly basis, i.e. an active account is an account that had at least one transaction within the last 12 months from the reporting date.