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 August 11, 2016

 

 

QIWI plc

 

 

Kennedy 12,

Kennedy Business Centre, 2nd Floor,

P.C. 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):

THIS REPORT ON FORM 6-K IS INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-212441), THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-205489), THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-204728), THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-190918) OF QIWI PLC AND IN THE OUTSTANDING PROSPECTUS CONTAINED IN SUCH REGISTRATION STATEMENT.

 

 

 


Exhibits

 

99.1    “QIWI Announces Second Quarter 2016 Financial Results” press release dated August 11, 2016


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: August 11, 2016     By:  

/s/ Alexander Karavaev

      Alexander Karavaev
      Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

QIWI Announces Second Quarter 2016 Financial Results

Second Quarter Total Adjusted Net Revenue Increased 4% to RUB 2,619 Million and Adjusted Net Profit Increased 23% to RUB 1,270 Million or RUB 21.02 per diluted share

QIWI downgrades 2016 Adjusted Net Revenue and Adjusted Net Profit Guidance

Board of Directors Approves Dividend of 22 cents per share

NICOSIA, CYPRUS – August 11, 2016 – QIWI plc, (NASDAQ: QIWI) (MOEX: QIWI) (“QIWI” or the “Company”) today announced results for the second quarter ended June 30, 2016.

Second Quarter 2016 Operating and Financial Highlights

 

    Total Adjusted Net Revenue increased 4% to RUB 2,619 million ($40.8 million)

 

    Adjusted EBITDA increased 11% to RUB 1,640 million ($25.5 million)

 

    Adjusted Net Profit increased 23% to RUB 1,270 million ($19.8 million), or RUB 21.02 per diluted share

 

    Total payment volume decreased 0.3% to RUB 202.2 billion ($3.1 billion)

“In the second quarter we continued to feel pressure from the macroeconomic slowdown in Russia, which affected our key market verticals,” said Sergey Solonin, QIWI’s chief executive officer. “Notwithstanding the challenging market, we managed to increase our payment adjusted net revenue as well as adjusted net profit. However, based on H1 2016 results and our current understanding of the trends in the second half of the year, we decided to decrease 2016 Adjusted Net Revenue and Adjusted Net Profit Guidance. Although current environment pressures our core business growth, we are firmly positioned to execute our strategy, widen our scope of services and enrich current payment landscape with new innovative solutions.”

Second Quarter 2016 Results

Revenues: Total Adjusted Net Revenue for the quarter ended June 30, 2016 was RUB 2,619 million ($40.8 million), an increase of 4% compared with RUB 2,525 million in the prior year.

Payment Adjusted Net Revenue was RUB 2,012 million ($31.3 million), an increase of 7% compared with RUB 1,876 million in the prior year. Payment Adjusted Net Revenue growth was predominantly driven by an increase in payment volumes in the E-commerce and Money Remittances market verticals resulting from the consolidation of the Contact and Rapida businesses partially offset by a decrease in payment volumes in the Telecom and Other market verticals and a decrease in net revenue yield in the Financial Services market vertical.

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, cash and settlement services and advertising, was RUB 607 million ($9.5 million), a decrease of 6% compared with RUB 649 million in the prior year. The decline in the second quarter was mainly due to decrease in cash and settlement services and interest revenue on overdrafts provided to agents, partially


offset by increase in inactivity fees. Inactivity fees for the second quarter ended June 30, 2016 were RUB 380 million ($5.9 million) compared with RUB 208 million in the prior year as a result of changes to the write-off policy as well as the consolidation of the Contact and Rapida businesses for the full quarter. Other Adjusted Net Revenue excluding revenue from fees for inactive accounts decreased 49% compared with the same period in the prior year.

Total Adjusted Net Revenue excluding revenue from fees for inactive accounts decreased 3% compared with the same period in the prior year.

Adjusted EBITDA: For the quarter ended June 30, 2016, Adjusted EBITDA was RUB 1,640 million ($25.5 million), an increase of 11% compared with RUB 1,483 million in the prior year. Adjusted EBITDA increase was largely due to the increase in Adjusted Net Revenue as well as due to the net effect of bad debt recovery in the amount of RUB 1 million in the second quarter 2016 as opposed to the bad debt reserve of RUB 50 million in the second quarter of 2015 and lower advertising expenses as compared to the same period in the prior year. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of Total Adjusted Net Revenue) was 62.6% compared with 58.7% in the prior year. Adjusted EBITDA excluding inactivity fees was RUB 1,260 million ($19.6 million), a decrease of 1% compared with RUB 1,275 million in the prior year. Adjusted EBITDA margin excluding inactivity fees was 56.3% compared with 55.0% in the prior year.

Adjusted Net Profit: For the quarter ended June 30, 2016, Adjusted Net Profit was RUB 1,270 million ($19.8 million), an increase of 23% compared with RUB 1,033 million in the prior year. The increase in Adjusted Net Profit was primarily driven by the same factors impacting Adjusted EBITDA. Adjusted Net Profit excluding inactivity fees (net of tax) increased 11% compared with the same period in the prior year.

Other Operating Data: For the quarter ended June 30, 2016, total payment volume was RUB 202.2 billion ($3.1 billion), a decrease of 0.3% compared with RUB 202.8 billion in the prior year. Dynamics of payment volume was driven by mixed trends across market verticals with growth in E-commerce, Financial Services and Money Remittance offset by declining volumes in Telecom and Other market verticals. Payment average net revenue yield was 1.00%, an increase of 8 bps compared with 0.92% in the prior year primarily due to the shift of product mix towards higher yielding E-commerce volumes.

Total average Net Revenue Yield was 1.30%, an increase of 6 bps as compared with 1.24% in the prior year. Total average Net Revenue Yield excluding the effect of inactivity fees was 1.11%, a decrease of 4 bps as compared with the same period in the prior year.

The number of active kiosks and terminals was 164,709 including Contact and Rapida physical points of service, a decrease of 7% compared with the prior year, primarily resulting from enhanced controls that the Central Bank of Russia has implemented over the agents. The number of active Visa Qiwi Wallet accounts was 16.2 million as of the end of the second quarter of 2016, a decrease of 0.8 million, or 5%, as compared with 17.0 million in the second quarter of 2015. The decrease was driven mainly by the lower marketing spend at the end of 2015 and first half of 2016 as compared to the prior year, as well as the decrease in the kiosk network in Russia in the second half of 2015 and overall economic downturn affecting consumer activity.


Recent Developments

Dividend: Following the determination of second quarter 2016 financial results our Board of Directors approved a dividend of USD 22 cents per share. The dividend record date is August 17, 2016, and the Company intends to pay the dividend on August 18, 2016. The holders of ADSs will receive the dividend shortly thereafter.

Dividend distributions for the remainder of 2016 are subject to our future cash flow needs, including our cash requirements in connection with potential M&A opportunities.

Regulation by the Central Bank of Russia: Our kiosk network in Russia was affected by the enhanced controls that the Central Bank of Russia has implemented to ensure compliance by the agents with legislation that requires them to remit their proceeds to special accounts, as disclosed in our Form 6-K filed on November 2, 2015.

Although this adversely affects the availability and convenience of our services to consumers in the short-term through the reduction of the size of our network, we continue to believe that increased transparency in the kiosk market has already improved our market share and will allow us to improve our market share in the future and strengthen our competitive advantages.

2016 Guidance1

QIWI downgrades its guidance in respect of 2016 Adjusted Net Revenue and Adjusted Net Profit outlook:

 

    Total Adjusted Net Revenue is expected to increase by 2% to 5% over 2015

 

    Adjusted Net Profit is expected to increase by 5% to 10% over 2015

The overall macroeconomic conditions continue to adversely affect the purchasing power of the Russian population as decreasing real wages put pressure on the disposable income. This in turn leads to the overall decrease in consumer spending and consequently our payment volumes.

We have also noted negative trends in Money Remittance market due to shifting migration trends. We anticipate that downward trends and weaker demand for money remittance services can negatively affect our volumes and revenues in this category.

 

1  Guidance is provided in Russian rubles


Earnings Conference Call and Audio Webcast

QIWI will host a conference call to discuss second quarter 2016 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 13642507. The replay will be available until Thursday, August 18, 2016. 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/.

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 16.2 million virtual wallets, over 164,000 kiosks and terminals, and enabled merchants to accept over RUB 67 billion cash and electronic payments monthly from over 60 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, statements regarding expected total adjusted net revenue, adjusted net profit and net revenue yield, dividend payments, payment volume growth, growth of physical and virtual distribution channels and trends in each of our market verticals. 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 macroeconomic conditions of the Russian Federation and in each of the international markets in which we operate, competition, a decline in average net revenue yield, 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

Varvara Kiseleva

Investor Relations

+357.25028091

ir@qiwi.com


QIWI plc.

Consolidated Statement of Financial Position

(in millions)

 

     As of December 31,
2015 (audited)
     As of June 30,
2016 (unaudited)
     As of June 30,
2016 (unaudited)
 
     RUB      RUB      USD(1)  

Assets

        

Non-current assets

        

Property and equipment

     366         447         7   

Goodwill and other intangible assets

     12,254         12,041         187   

Long-term debt instruments

     1,563         394         6   

Long-term loans

     23         23         0   

Other non-current assets

     52         60         1   

Deferred tax assets

     304         255         4   
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     14,562         13,220         206   
  

 

 

    

 

 

    

 

 

 

Current assets

        

Trade and other receivables

     5,092         3,550         55   

Short-term loans

     340         57         1   

Short-term debt instruments

     1,338         2,959         46   

Prepaid income tax

     97         126         2   

VAT and other taxes receivable

     26         31         0   

Cash and cash equivalents

     19,363         13,871         216   

Other current assets

     759         636         10   
  

 

 

    

 

 

    

 

 

 

Total current assets

     27,015         21,230         330   
  

 

 

    

 

 

    

 

 

 

Total assets

     41,577         34,450         536   
  

 

 

    

 

 

    

 

 

 

Equity and liabilities

        

Equity attributable to equity holders of the parent

        

Share capital

     1         1         0   

Additional paid-in capital

     1,876         1,876         29   

Share premium

     12,068         12,068         188   

Other reserve

     840         840         13   

Retained earnings

     7,177         5,714         89   

Translation reserve

     461         212         3   
  

 

 

    

 

 

    

 

 

 

Total equity attributable to equity holders of the parent

     22,423         20,711         322   

Non-controlling interest

     13         13         0   
  

 

 

    

 

 

    

 

 

 

Total equity

     22,436         20,724         323   
  

 

 

    

 

 

    

 

 

 

Non-current liabilities

        

Other non-current liabilities

     3         2         0   

Deferred tax liabilities

     1,138         1,045         16   
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     1,141         1,047         16   
  

 

 

    

 

 

    

 

 

 

Current liabilities

        

Trade and other payables

     15,295         11,163         174   

Amounts due to customers and amounts due to banks

     2,243         1,060         16   

Income tax payable

     334         314         5   

VAT and other taxes payable

     119         129         2   

Other current liabilities

     9         13         0   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     18,000         12,679         197   
  

 

 

    

 

 

    

 

 

 

Total equity and liabilities

     41,577         34,450         536   
  

 

 

    

 

 

    

 

 

 

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in millions, except per share data)

 

     Three months ended (unaudited)  
     June 30, 2015     June 30, 2016     June 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     4,197        4,416        69   

Operating costs and expenses:

      

Cost of revenue (exclusive of depreciation and amortization)

     1,946        2,094        33   

Selling general and administrative expenses

     793        682        11   

Depreciation and amortization

     157        191        3   

Profit from operations

     1,301        1,449        23   
  

 

 

   

 

 

   

 

 

 

Gain from disposal of subsidiaries

     33        —          —     

Other income

     3        1        0   

Other expenses

     (10     (3     (0

Foreign exchange gain

     106        190        3   

Foreign exchange loss

     (405     (468     (7

Interest income

     1        9        0   

Interest expense

     (28     (14     (0
  

 

 

   

 

 

   

 

 

 

Profit before tax

     1,002        1,164        18   

Income tax expense

     (259     (235     (4
  

 

 

   

 

 

   

 

 

 

Net profit

     743        929        14   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     632        926        14   

Non-controlling interests

     111        3        0   

Other comprehensive income

      

Exchange differences on translation of foreign operations

      

Differences arising during the year

     (18     (65     (1

Accumulated exchange differences reclassified to earnings upon disposal of foreign operations

     56        —          —     
  

 

 

   

 

 

   

 

 

 

Total comprehensive income net of tax

     781        864        13   
  

 

 

   

 

 

   

 

 

 

attributable to:

      

Equity holders of the parent

     639        861        13   

Non-controlling interests

     142        3        0   

Earnings per share:

      

Basic profit attributable to ordinary equity holders of the parent

     11.32        15.32        0.24   

Diluted profit attributable to ordinary equity holders of the parent

     11.25        15.32        0.24   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in millions, except per share data)

 

     Six months ended (unaudited)  
     June 30, 2015     June 30, 2016     June 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     8,168        8,576        133   

Operating costs and expenses:

      

Cost of revenue (exclusive of depreciation and amortization)

     3,686        4,057        63   

Selling general and administrative expenses

     1,445        1,413        22   

Depreciation and amortization

     259        377        6   

Profit from operations

     2,778        2,729        42   
  

 

 

   

 

 

   

 

 

 

Gain from disposal of subsidiaries

     33        —          —     

Other income

     8        3        0   

Other expenses

     (11     (8     (0

Foreign exchange gain

     384        695        11   

Foreign exchange loss

     (578     (1,350     (21

Interest income

     2        24        0   

Interest expense

     (41     (40     (1
  

 

 

   

 

 

   

 

 

 

Profit before tax

     2,574        2,053        32   

Income tax expense

     (552     (409     (6
  

 

 

   

 

 

   

 

 

 

Net profit

     2,022        1,644        26   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     1,940        1,638        25   

Non-controlling interests

     82        6        0   

Other comprehensive income

      

Exchange differences on translation of foreign operations

      

Differences arising during the year

     15        (249     (4

Accumulated exchange differences reclassified to earnings upon disposal of foreign operations

     56        —          —     
  

 

 

   

 

 

   

 

 

 

Total comprehensive income net of tax

     2,093        1,395        22   
  

 

 

   

 

 

   

 

 

 

attributable to:

      

Equity holders of the parent

     1,984        1,389        22   

Non-controlling interests

     109        6        0   

Earnings per share:

      

Basic profit attributable to ordinary equity holders of the parent

     35.15        27.11        0.42   

Diluted profit attributable to ordinary equity holders of the parent

     34.94        27.11        0.42   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.


QIWI plc.

Consolidated Statement of Cash Flows

(in millions)

 

     Six months ended (unaudited)  
     June 30, 2015     June 30, 2016     June 30, 2016  
     RUB     RUB     USD(1)  

Cash flows from operating activities

      

Profit before tax

     2,574        2,053        32   
  

 

 

   

 

 

   

 

 

 

Adjustments to reconcile profit before income tax to net cash flow (used in)/generated from operating activities

      

Depreciation and amortization

     259        377        6   

Foreign exchange loss (gain), net

     195        655        10   

Interest income, net

     (345     (367     (6

Bad debt expense/(recovery), net

     (17     11        0   

Share-based payments

     47        —          —     

Gain from disposal of subsidiaries

     (33     —          —     

Other

     (10     (2     (0
  

 

 

   

 

 

   

 

 

 

Operating profit before changes in working capital

     2,670        2,727        42   
  

 

 

   

 

 

   

 

 

 

Decrease in trade and other receivables

     3,504        1,548        24   

Decrease in other assets

     19        118        2   

Decrease in amounts due to customers and amounts due to banks

     (793     (1,183     (18

Decrease in accounts payable and accruals

     (10,421     (4,117     (64

Decrease in loans issued from banking operations

     7        7        0   
  

 

 

   

 

 

   

 

 

 

Cash used in operations

     (5,014     (900     (14
  

 

 

   

 

 

   

 

 

 

Interest received

     409        357        6   

Interest paid

     (28     (60     (1

Income tax paid

     (390     (502     (8
  

 

 

   

 

 

   

 

 

 

Net cash flow used in operating activities

     (5,023     (1,105     (17
  

 

 

   

 

 

   

 

 

 

Cash flows (used in)/generated from investing activities

      

Cash acquired upon business combination

     3,200        —          —     

Purchase of available-for-sale investments

     (6     —          —     

Purchase of property and equipment

     (54     (154     (2

Purchase of intangible assets

     (83     (101     (2

Net cash outflow on disposal of subsidiaries

     (16     —          —     

Loans issued

     (37     (508     (8

Repayment of loans issued

     —          760        12   

Purchase of debt instruments

     (982     (400     (6

Proceeds from settlement of debt instruments

     2,046        —          —     
  

 

 

   

 

 

   

 

 

 

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

     4,068        (403     (6
  

 

 

   

 

 

   

 

 

 

Cash flows used in financing activities

      

Proceeds from borrowings

     54        2        0   

Repayment of borrowings

     (259     (4     (0

Dividends paid to owners of the Group

     (699     (2,909     (45

Dividends paid to non-controlling shareholders

     —          (6     (0

Net cash flow used in financing activities

     (904     (2,917     (45
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (204     (1,067     (17
  

 

 

   

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (2,063     (5,492     (85
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the beginning of the period

     17,095        19,363        301   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     15,032        13,871        216   
  

 

 

   

 

 

   

 

 

 

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.


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 primarily consists 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, 2015     June 30, 2016     June 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     4,197        4,416        68.7   

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

     1,946        2,094        32.6   

Plus: Compensation to employees and related taxes

     275        297        4.6   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     2,525        2,619        40.8   
  

 

 

   

 

 

   

 

 

 

Payment Revenue(2)

     3,232        3,621        56.3   

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

     1,568        1,851        28.8   

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

     212        242        3.8   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     1,876        2,012        31.3   
  

 

 

   

 

 

   

 

 

 

Other Revenue(5)

     965        795        12.4   

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

     378        243        3.8   

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

     63        55        0.8   
  

 

 

   

 

 

   

 

 

 

Other Adjusted Net Revenue

     649        607        9.5   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     1,876        2,012        31.3   

E-commerce

     677        832        13.0   

Financial services

     404        367        5.7   

Money remittances

     411        525        8.2   

Telecom

     261        197        3.1   

Other

     123        91        1.4   

Other Adjusted Net Revenue

     649        607        9.5   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     2,525        2,619        40.8   
  

 

 

   

 

 

   

 

 

 

Net Profit

     743        929        14.5   
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     157        191        3.0   

Other income

     (3     (1     (0.0

Other expenses

     10        3        0.0   

Foreign exchange gain

     (106     (190     (3.0

Foreign exchange loss

     405        468        7.3   

Interest income

     (1     (9     (0.1

Interest expenses

     28        14        0.2   

Income tax expenses

     259        235        3.7   

Share-based payments expenses

     26        —          —     

Gain from disposal of subsidiaries

     (33     —          —     
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     1,483        1,640        25.5   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     58.7     62.6     62.6

Net profit

     743        929        14.5   

Amortization of fair value adjustments(7)

     44        93        1.4   

Share-based payments expenses

     26        —          —     

Effect of taxation of the above items

     (8     (18     (0.3

Gain from disposal of subsidiaries

     (33     —          —     

Foreign Exchange loss on June 2014 offering proceeds(8)

     261        266        4.1   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit

     1,033        1,270        19.8   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     18.50        21.02        0.33   

Diluted

     18.40        21.02        0.33   

Shares used in computing Adjusted Net Profit per share

      

Basic

     55,849        60,427        60,427   

Diluted

     56,177        60,427        60,427   


 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.
(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 primarily consists 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) Amortization of fair value adjustments primarily includes the effect of the acquisition of control in Contact and Rapida.
(8) The Forex loss on SPO funds as presented in the reconciliation of Net Profit to Adjusted Net Profit differs from the Foreign exchange loss and Foreign exchange gain 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 loss on the US dollar amount, which we received at SPO.


QIWI plc.

Reconciliation of IFRS to Non-IFRS Operating Results

(in millions, except per share data)

 

     Six months ended  
     June 30, 2015     June 30, 2016     June 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     8,168        8,576        133.5   

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

     3,686        4,057        63.1   

Plus: Compensation to employees and related taxes

     558        609        9.5   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     5,040        5,128        79.8   
  

 

 

   

 

 

   

 

 

 

Payment Revenue(2)

     6,244        7,056        109.8   

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

     2,955        3,540        55.1   

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

     426        500        7.8   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     3,716        4,016        62.5   
  

 

 

   

 

 

   

 

 

 

Other Revenue(5)

     1,925        1,520        23.7   

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

     732        517        8.0   

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

     132        109        1.7   
  

 

 

   

 

 

   

 

 

 

Other Adjusted Net Revenue

     1,324        1,112        17.3   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     3,716        4,016        62.5   

E-commerce

     1,411        1,660        25.8   

Financial services

     801        736        11.4   

Money remittances

     732        1,007        15.7   

Telecom

     506        414        6.4   

Other

     265        200        3.1   

Other Adjusted Net Revenue

     1,324        1,112        17.3   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     5,040        5,128        79.8   
  

 

 

   

 

 

   

 

 

 

Net Profit

     2,022        1,644        25.6   
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     259        377        5.9   

Other income

     (8     (3     (0.0

Other expenses

     11        8        0.1   

Foreign exchange gain

     (384     (695     (10.8

Foreign exchange loss

     578        1,350        21.0   

Interest income

     (2     (24     (0.4

Interest expenses

     41        40        0.6   

Income tax expenses

     552        409        6.4   

Share-based payments expenses

     46        —          —     

Gain from disposal of subsidiaries

     (33     —          —     
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     3,083        3,106        48.3   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     61.2     60.6     60.6

Net profit

     2,022        1,644        25.6   

Amortization of fair value adjustments(7)

     60        184        2.9   

Share-based payments expenses

     46        —          —     

Effect of taxation of the above items

     (11     (35     (0.5

Gain from disposal of subsidiaries

     (33     —          —     

Foreign Exchange loss on June 2014 offering proceeds(8)

     65        710        11.0   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit

     2,150        2,503        39.0   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     38.96        41.43        0.64   

Diluted

     38.73        41.43        0.64   

Shares used in computing Adjusted Net Profit per share

      

Basic

     55,200        60,424        60,424   

Diluted

     55,531        60,424        60,424   


 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.
(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 primarily consists 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) Amortization of fair value adjustments primarily includes the effect of the acquisition of control in Contact and Rapida.
(8) The Forex loss on SPO funds as presented in the reconciliation of Net Profit to Adjusted Net Profit differs from the Foreign exchange loss and Foreign exchange gain 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 loss on the US dollar amount, which we received at SPO.


QIWI plc.

Other Operating Data

 

     Three months ended  
     June 30, 2015(1)     June 30, 2016     June 30, 2016  
     RUB     RUB     USD (2)  

Payment volume (billion)(3)(4)

     202.8        202.2        3.1   
  

 

 

   

 

 

   

 

 

 

E-commerce

     26.3        31.9        0.5   

Financial services

     54.2        63.9        1.0   

Money remittances

     35.0        39.1        0.6   

Telecom

     66.1        49.6        0.8   

Other

     21.3        17.6        0.3   
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(5)

     1,876.1        2,012.4        31.3   
  

 

 

   

 

 

   

 

 

 

E-commerce

     677.2        832.3        13.0   

Financial services

     403.6        367.3        5.7   

Money remittances

     411.1        524.5        8.2   

Telecom

     261.3        197.3        3.1   

Other

     122.8        91.1        1.4   
  

 

 

   

 

 

   

 

 

 

Payment average net revenue yield

     0.92     1.00     1.00
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.58     2.61     2.61

Financial services

     0.74     0.57     0.57

Money remittances

     1.18     1.34     1.34

Telecom

     0.40     0.40     0.40

Other

     0.58     0.52     0.52
  

 

 

   

 

 

   

 

 

 

Total average Net Revenue Yield

     1.24     1.30     1.30

Active kiosks and terminals (units)(6)

     176,831        164,709        164,709   

Active Qiwi Wallet accounts (million)(7)

     17.0        16.2        16.2   

 

(1) Payment volumes and payment average net revenue yields presented for the respective period in 2015 differ from the data previously published, including as presented in our 20-F and our quarterly earnings releases, and reflect adjustments made to the methodology of payment volumes recognition and allocation between different market verticals in Contact and Rapida starting June 2015 as a result of our ongoing effort to bring Contact and Rapida methodology in line with QIWI’s processes and procedures (see also Note (4) below). The adjustments made reduce total volumes for the period starting June 2, 2015 to December 31, 2015 and January 1, 2016 to March 31, 2016 by approximately RUB 13.8 billion and RUB 7.0 billion, respectively. Besides, certain reallocation of volumes between different market verticals shall be reflected in future earnings releases.
(2) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.
(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 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 used in QIWI’s international operations will be brought in conformity with the methodology of QIWI’s Russian operations.
(4) 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.
(5) Payment Adjusted Net Revenue is calculated as the difference between Payment Revenue and Cost of payment revenue (excluding D&A) plus compensation to employees and related taxes allocated to payment revenue. Payment Revenue primarily consists of merchant and consumer fees. Cost of payment revenue primarily consists of commission to agents.
(6) 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.
(7) 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, 2015(1)     June 30, 2016(1)     June 30, 2016  
     RUB     RUB     USD (2)  

Payment volume (billion)(3)(4)

     361.1        393.3        6.1   
  

 

 

   

 

 

   

 

 

 

E-commerce

     47.0        60.4        0.9   

Financial services

     89.0        124.1        1.9   

Money remittances

     53.9        72.2        1.1   

Telecom

     126.9        99.3        1.5   

Other

     44.3        37.3        0.6   
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(5)

     3,715.6        4,016.1        62.5   
  

 

 

   

 

 

   

 

 

 

E-commerce

     1,411.1        1,659.6        25.8   

Financial services

     800.7        735.5        11.4   

Money remittances

     732.4        1,007.5        15.7   

Telecom

     506.4        413.9        6.4   

Other

     264.9        199.7        3.1   
  

 

 

   

 

 

   

 

 

 

Payment average net revenue yield

     1.03     1.02     1.02
  

 

 

   

 

 

   

 

 

 

E-commerce

     3.00     2.75     2.75

Financial services

     0.90     0.59     0.59

Money remittances

     1.36     1.40     1.40

Telecom

     0.40     0.42     0.42

Other

     0.60     0.54     0.54
  

 

 

   

 

 

   

 

 

 

Total average Net Revenue Yield

     1.40     1.30     1.30

Active kiosks and terminals (units)(6)

     176,831        164,709        164,709   

Active Qiwi Wallet accounts (million)(7)

     17.0        16.2        16.2   

 

(1) Payment volumes and payment average net revenue yields presented for the respective period in 2015 differ from the data previously published, including as presented in our 20-F and our quarterly earnings releases, and reflect adjustments made to the methodology of payment volumes recognition and allocation between different market verticals in Contact and Rapida starting June 2015 as a result of our ongoing effort to bring Contact and Rapida methodology in line with QIWI’s processes and procedures (see also Note (4) below). The adjustments made reduce total volumes for the period starting June 2, 2015 to December 31, 2015, and January 1, 2016 to March 31, 2016 by approximately RUB 13.8 billion and RUB 7.0 billion, respectively. Besides, certain reallocation of volumes between different market verticals shall be reflected in future earnings releases.
(2) Calculated using a ruble to U.S. dollar exchange rate of RUB 64.258 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2016.
(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 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 used in QIWI’s Russian operations.
(4) 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.
(5) Payment Adjusted Net Revenue is calculated as the difference between Payment Revenue and Cost of payment revenue (excluding D&A) plus compensation to employees and related taxes allocated to payment revenue. Payment Revenue primarily consists of merchant and consumer fees. Cost of payment revenue primarily consists of commission to agents.
(6) 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.
(7) 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.