Form 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 November 22, 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  ☒            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  ☒

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 Third Quarter 2016 Financial Results” press release dated November 22, 2016
99.2    “QIWI Corporate Overview” presentation dated November 22, 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: November 22, 2016   By:  

/s/ Alexander Karavaev

    Alexander Karavaev
    Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

QIWI Announces Third Quarter 2016 Financial Results

Third Quarter Total Adjusted Net Revenue Increased 5% to RUB 2,662 Million and Adjusted Net Profit

Increases 12% to RUB 1,271 Million or RUB 20.90 per diluted share

QIWI announces its new project SOVEST

QIWI reiterates 2016 Guidance

Board of Directors Approves Dividend of 22 cents per share

NICOSIA, CYPRUS – November 22, 2016 – QIWI plc, (NASDAQ: QIWI) (MOEX: QIWI) (“QIWI” or the “Company”) today announced results for the third quarter ended September 30, 2016.

Third Quarter 2016 Operating and Financial Highlights

 

    Total Adjusted Net Revenue increased 5% to RUB 2,662 million ($42.1 million)

 

    Adjusted EBITDA increased 25% to RUB 1,669 million ($26.4 million)

 

    Adjusted Net Profit increased 12% to RUB 1,271 million ($20.1 million), or RUB 20.90 per diluted share

 

    Total payment volume decreased 19% to RUB 214.5 billion ($3.4 billion)

“Although in the third quarter we continued to face challenges across most market verticals in our core business that were triggered among other factors by the macroeconomic slowdown in Russia, I’m happy to provide some important updates on our strategy and development,” 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. Further, I’m glad to introduce our new project SOVEST – an incredibly convenient and beneficial financial instrument targeted at a wide range of customers. I believe that although current environment pressures our core growth, we are firmly positioned to execute our strategy, widen our scope of services and enrich current payment landscape with new innovative solutions.”

Third Quarter 2016 Results

Revenues: Total Adjusted Net Revenue for the quarter ended September 30, 2016 was RUB 2,662 million ($42.1 million), an increase of 5% compared with RUB 2,529 million in the prior year.

Payment Adjusted Net Revenue was RUB 2,105 million ($33.3 million), an increase of 15% compared with RUB 1,836 million in the prior year. Payment Adjusted Net Revenue growth was predominantly driven by an improvement in yields across all market verticals resulting from pricing optimization and shift in product mix as well as volume growth in the E-commerce market vertical partially offset by a decrease in payment volumes in the Telecom, Money Remittances, Financial Services and Other market verticals.

Other Adjusted Net Revenue, which is principally composed of revenue from inactivity fees, interest revenue including revenue on overdrafts provided to agents, revenue from rent of space for kiosks, cash


and settlement services and advertising, was RUB 557 million ($8.8 million), a decrease of 20% compared with RUB 693 million in the prior year. The decline in the third quarter was mainly due to decrease in cash and settlement services. Inactivity fees for the third quarter ended September 30, 2016 were RUB 348 million ($5.5 million) compared with RUB 321 million in the prior year as a result of changes to the write-off policy. Other Adjusted Net Revenue excluding revenue from fees for inactive accounts decreased 44% compared with the same period in the prior year.

Total Adjusted Net Revenue excluding revenue from fees for inactive accounts increased 5% compared with the same period in the prior year.

Adjusted EBITDA: For the quarter ended September 30, 2016, Adjusted EBITDA was RUB 1,669 million ($26.4 million), an increase of 25% compared with RUB 1,340 million in the prior year. Adjusted EBITDA increase was largely due to the increase in Adjusted Net Revenue as well as the immaterial bad debt expense in the third quarter 2016 as opposed to the bad debt expense of RUB 90 million in the third quarter of 2015 and lower personnel (excluding the effect of share-based payments) and office maintenance 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 62.7% compared with 53.0% in the prior year. Adjusted EBITDA excluding inactivity fees was RUB 1,321 million ($20.9 million), an increase of 30% compared with RUB 1,019 million in the prior year. Adjusted EBITDA margin excluding inactivity fees was 57.1% compared with 46.2% in the prior year.

Adjusted Net Profit: For the quarter ended September 30, 2016, Adjusted Net Profit was RUB 1,271 million ($20.1 million), an increase of 12% compared with RUB 1,133 million in the prior year. The increase in Adjusted Net Profit was primarily driven by the same factors impacting Adjusted EBITDA offset by a decrease of foreign exchange gain1 generated in the third quarter 2016 as compared to the third quarter of 2015. Adjusted Net Profit excluding inactivity fees (net of tax) increased 13% compared with the same period in the prior year.

Other Operating Data: For the quarter ended September 30, 2016, total payment volume was RUB 214.5 billion ($3.4 billion), a decrease of 19% compared with RUB 265.1 billion in the prior year. Dynamics of payment volume was driven by mixed trends across market verticals with growth in E-commerce offset by declining volumes across all other market verticals. Payment average net revenue yield was 0.98%, an increase of 29 bps compared with 0.69% in the prior year primarily due to the optimization of pricing and shift of the revenue mix towards higher yielding services.

Total average Net Revenue Yield was 1.24%, an increase of 29 bps as compared with 0.95% in the prior year. Total average Net Revenue Yield excluding the effect of inactivity fees was 1.08%, an increase of 25 bps as compared with the same period in the prior year.

The number of active kiosks and terminals was 163,049 including Contact and Rapida physical points of service, a decrease of 6% 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 16.5 million as of the end third quarter of 2016, a decrease of 0.2 million, or 1%, as compared with 16.7 million in the third quarter of 2015. The decrease was driven mainly by the lower marketing expenses aimed at the acquisition of new consumers at the end of 2015 and first half of 2016 as

 

1  Foreign exchange gain/loss is calculated as total foreign exchange gain/loss, net recognized in the statement of comprehensive income excluding the effect of foreign exchange gain/loss on June 2014 offering proceed


compared to a 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 third quarter 2016 financial results our Board of Directors approved a dividend of USD 22 cents per share. The dividend record date is December 5, 2016, and the Company intends to pay the dividend on December 6, 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 our new projects or otherwise.

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.

SOVEST: today QIWI announced its new project SOVEST. SOVEST is a new consumer oriented payment-by installments card product developed to help customers get easy, convenient and transparent access to funds and purchase goods and services from partner merchants in the most beneficial way.

2016 Guidance2

QIWI reiterates 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 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.

Earnings Conference Call and Audio Webcast

QIWI will host a conference call to discuss third quarter 2016 financial results today at 8:30 a.m. ET. Hosting the call will be Sergey Solonin, chief executive officer, Alexander Karavaev, chief financial

 

2 

Guidance is provided in Russian rubles


officer, and Oleg Ryazhenov-Sims, Project CEO. 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 (844) 512-2921 or +1 (412) 317-6671 for international callers; the pin number is 13649855. The replay will be available until Tuesday, November 29, 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 16.5 million virtual wallets, over 163,000 kiosks and terminals, and enabled merchants to accept over RUB 71 billion cash and electronic payments monthly from over 58 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,      As of September 30,      As of September 30,  
     2015 (audited)      2016 (unaudited)      2016 (unaudited)  
     RUB      RUB      USD(1)  

Assets

        

Non-current assets

        

Property and equipment

     366         514         8   

Goodwill and other intangible assets

     12,254         11,993         190   

Long-term debt instruments

     1,563         397         6   

Long-term loans

     23         134         2   

Other non-current assets

     52         59         1   

Deferred tax assets

     304         228         4   
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     14,562         13,325         211   
  

 

 

    

 

 

    

 

 

 

Current assets

        

Trade and other receivables

     5,092         3,624         57   

Short-term loans

     340         45         1   

Short-term debt instruments

     1,338         1,785         28   

Prepaid income tax

     97         105         2   

VAT and other taxes receivable

     26         43         1   

Cash and cash equivalents

     19,363         16,695         264   

Other current assets

     759         802         13   
  

 

 

    

 

 

    

 

 

 

Total current assets

     27,015         23,099         366   
  

 

 

    

 

 

    

 

 

 

Total assets

     41,577         36,424         577   
  

 

 

    

 

 

    

 

 

 

Equity and liabilities

        

Equity attributable to equity holders of the parent

        

Share capital

     1         1         0   

Additional paid-in capital

     1,876         1,876         30   

Share premium

     12,068         12,068         191   

Other reserve

     840         976         15   

Retained earnings

     7,177         5,806         92   

Translation reserve

     461         186         3   
  

 

 

    

 

 

    

 

 

 

Total equity attributable to equity holders of the parent

     22,423         20,913         331   

Non-controlling interest

     13         16         0   
  

 

 

    

 

 

    

 

 

 

Total equity

     22,436         20,929         331   
  

 

 

    

 

 

    

 

 

 

Non-current liabilities

        

Other non-current liabilities

     3         2         0   

Deferred tax liabilities

     1,138         1,022         16   
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     1,141         1,024         16   
  

 

 

    

 

 

    

 

 

 

Current liabilities

        

Trade and other payables

     15,295         12,448         197   

Amounts due to customers and amounts due to banks

     2,243         1,590         25   

Income tax payable

     334         313         5   

VAT and other taxes payable

     119         108         2   

Other current liabilities

     9         12         0   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     18,000         14,471         229   
  

 

 

    

 

 

    

 

 

 

Total equity and liabilities

     41,577         36,424         577   
  

 

 

    

 

 

    

 

 

 

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 30, 2016.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in millions, except per share data)

 

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

Revenue

     4,691        4,412        70   

Operating costs and expenses:

      

Cost of revenue (exclusive of depreciation and amortization)

     2,488        2,095        33   

Selling general and administrative expenses

     878        784        12   

Depreciation and amortization

     209        195        3   

Profit from operations

     1,116        1,338        21   
  

 

 

   

 

 

   

 

 

 

Other income

     7        3        0   

Other expenses

     —          (50     (1

Foreign exchange gain

     1,667        80        1   

Foreign exchange loss

     (586     (135     (2

Interest income

     1        5        0   

Interest expense

     (37     (12     (0
  

 

 

   

 

 

   

 

 

 

Profit before tax

     2,168        1,229        19   

Income tax expense

     (186     (243     (4
  

 

 

   

 

 

   

 

 

 

Net profit

     1,982        986        16   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     1,980        982        16   

Non-controlling interests

     2        4        0   

Other comprehensive income

      

Exchange differences on translation of foreign operations

      

Differences arising during the year

     72        (26     (0
  

 

 

   

 

 

   

 

 

 

Total comprehensive income net of tax

     2,054        960        15   
  

 

 

   

 

 

   

 

 

 

attributable to:

      

Equity holders of the parent

     2,051        956        15   

Non-controlling interests

     3        4        0   

Earnings per share:

      

Basic profit attributable to ordinary equity holders of the parent

     32.79        16.14        0.26   

Diluted profit attributable to ordinary equity holders of the parent

     32.74        16.05        0.25   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 30, 2016.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in millions, except per share data)

 

     Nine months ended (unaudited)  
     September 30, 2015     September 30, 2016     September 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     12,859        12,988        206   

Operating costs and expenses:

      

Cost of revenue (exclusive of depreciation and amortization)

     6,175        6,152        97   

Selling general and administrative expenses

     2,323        2,197        35   

Depreciation and amortization

     468        572        9   

Profit from operations

     3,894        4,067        64   
  

 

 

   

 

 

   

 

 

 

Gain from disposal of subsidiaries

     33        —          —     

Other income

     15        6        0   

Other expenses

     (11     (58     (1

Foreign exchange gain

     1,801        775        12   

Foreign exchange loss

     (915     (1,485     (24

Interest income

     3        29        0   

Interest expense

     (78     (52     (1
  

 

 

   

 

 

   

 

 

 

Profit before tax

     4,742        3,282        52   

Income tax expense

     (738     (652     (10
  

 

 

   

 

 

   

 

 

 

Net profit

     4,004        2,630        42   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     3,920        2,620        41   

Non-controlling interests

     84        10        0   

Other comprehensive income

      

Exchange differences on translation of foreign operations

      

Differences arising during the year

     87        (275     (4

Accumulated exchange differences reclassified to earnings upon disposal of foreign operations

     56        —          —     
  

 

 

   

 

 

   

 

 

 

Total comprehensive income net of tax

     4,147        2,355        37   
  

 

 

   

 

 

   

 

 

 

attributable to:

      

Equity holders of the parent

     4,035        2,345        37   

Non-controlling interests

     112        10        0   

Earnings per share:

      

Basic profit attributable to ordinary equity holders of the parent

     68.84        43.25        0.68   

Diluted profit attributable to ordinary equity holders of the parent

     68.61        43.17        0.68   

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 30, 2016.


QIWI plc.

Consolidated Statement of Cash Flows

(in millions)

 

     Nine months ended (unaudited)  
     September 30,     September 30,     September 30,  
     2015     2016     2016  
     RUB     RUB     USD(1)  

Cash flows from operating activities

      

Profit before tax

     4,742        3,282        52   
  

 

 

   

 

 

   

 

 

 

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

      

Depreciation and amortization

     468        572        9   

Foreign exchange loss/(gain), net

     (886     710        11   

Interest income, net

     (455     (592     (9

Bad debt expense, net

     73        11        0   

Share-based payments

     62        136        2   

Gain from disposal of subsidiaries

     (33     —          —     

Other

     (12     36        1   
  

 

 

   

 

 

   

 

 

 

Operating profit before changes in working capital

     3,959        4,155        66   
  

 

 

   

 

 

   

 

 

 

Decrease in trade and other receivables

     3,442        1,475        23   

Decrease in other assets

     134        27        0   

Decrease in amounts due to customers and amounts due to banks

     (869     (653     (10

Decrease in accounts payable and accruals

     (12,219     (2,928     (46

Decrease in loans issued from banking operations

     12        7        0   
  

 

 

   

 

 

   

 

 

 

Cash (used in)/ generated from operations

     (5,541     2,083        33   
  

 

 

   

 

 

   

 

 

 

Interest received

     545        591        9   

Interest paid

     (84     (80     (1

Income tax paid

     (585     (721     (11
  

 

 

   

 

 

   

 

 

 

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

     (5,665     1,873        30   
  

 

 

   

 

 

   

 

 

 

Cash flows generated from investing activities

      

Cash acquired/(spent) upon business combination

     3,200        (10     (0

Purchase of available-for-sale investments

     (6     —          —     

Proceeds from sale of investments

     8        —          —     

Purchase of property and equipment

     (82     (259     (4

Purchase of intangible assets

     (192     (198     (3

Net cash outflow on disposal of subsidiaries

     (16     —          —     

Loans issued

     (43     (659     (10

Repayment of loans issued

     —          762        12   

Purchase of debt instruments

     (982     (549     (9

Proceeds from settlement of debt instruments

     2,045        1,326        21   
  

 

 

   

 

 

   

 

 

 

Net cash flow generated from investing activities

     3,932        413        7   
  

 

 

   

 

 

   

 

 

 

Cash flows used in financing activities

      

Proceeds from borrowings

     55        2        0   

Repayment of borrowings

     (484     (4     (0

Dividends paid to owners of the Group

     (699     (3,776     (60

Dividends paid to non-controlling shareholders

     —          (7     (0

Net cash flow used in financing activities

     (1,128     (3,785     (60
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     935        (1,169     (19
  

 

 

   

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (1,926     (2,668     (42
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the beginning of the period

     17,095        19,363        307   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     15,169        16,695        264   
  

 

 

   

 

 

   

 

 

 

 

(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 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)  
     September 30, 2015     September 30, 2016     September 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     4,691        4,412        69.9   

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

     2,488        2,095        33.2   

Plus: Compensation to employees and related taxes

     326        345        5.5   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     2,529        2,662        42.1   
  

 

 

   

 

 

   

 

 

 

Payment Revenue(2)

     3,701        3,674        58.2   

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

     2,123        1,857        29.4   

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

     258        288        4.6   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     1,836        2,105        33.3   
  

 

 

   

 

 

   

 

 

 

Other Revenue(5)

     990        738        11.7   

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

     366        238        3.8   

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

     69        57        0.9   
  

 

 

   

 

 

   

 

 

 

Other Adjusted Net Revenue

     693        557        8.8   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     1,836        2,105        33.3   

E-commerce

     678        863        13.7   

Financial services

     233        357        5.7   

Money remittances

     546        587        9.3   

Telecom

     262        202        3.2   

Other

     117        96        1.5   

Other Adjusted Net Revenue

     693        557        8.8   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     2,529        2,662        42.1   
  

 

 

   

 

 

   

 

 

 

Net Profit

     1,982        986        15.6   
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     209        195        3.1   

Other income

     (7     (3     (0.0

Other expenses

     —          50        0.8   

Foreign exchange gain

     (1,667     (80     (1.3

Foreign exchange loss

     586        135        2.1   

Interest income

     (1     (5     (0.1

Interest expenses

     37        12        0.2   

Income tax expenses

     186        243        3.8   

Share-based payments expenses

     15        136        2.2   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     1,340        1,669        26.4   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     53.0     62.7     62.7

Net profit

     1,982        986        15.6   

Amortization of fair value adjustments(7)

     106        92        1.5   

Share-based payments expenses

     15        136        2.2   

Effect of taxation of the above items

     (20     (19     (0.3

Foreign Exchange loss/(gain) on June 2014 offering proceeds(8)

     (950     76        1.2   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit

     1,133        1,271        20.1   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     18.77        21.01        0.33   

Diluted

     18.74        20.90        0.33   

Shares used in computing Adjusted Net Profit per share

      

Basic

     60,373        60,477        60,477   

Diluted

     60,467        60,797        60,797   

 


(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 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/(gain) 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)

 

     Nine months ended  
     September 30, 2015     September 30, 2016     September 30, 2016  
     RUB     RUB     USD(1)  

Revenue

     12,859        12,988        205.6   

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

     6,175        6,152        97.4   

Plus: Compensation to employees and related taxes

     884        954        15.1   

Total Adjusted Net Revenue

     7,569        7,790        123.3   
  

 

 

   

 

 

   

 

 

 

Payment Revenue(2)

     9,945        10,730        169.9   
  

 

 

   

 

 

   

 

 

 

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

     5,077        5,397        85.5   

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

     684        788        12.5   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     5,551        6,121        96.9   
  

 

 

   

 

 

   

 

 

 

Other Revenue(5)

     2,915        2,258        35.7   

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

     1,097        755        12.0   

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

     200        166        2.6   
  

 

 

   

 

 

   

 

 

 

Other Adjusted Net Revenue

     2,018        1,669        26.4   
  

 

 

   

 

 

   

 

 

 

Payment Adjusted Net Revenue

     5,551        6,121        96.9   

E-commerce

     2,089        2,523        39.9   

Financial services

     1,034        1,093        17.3   

Money remittances

     1,279        1,594        25.2   

Telecom

     768        615        9.7   

Other

     382        296        4.7   

Other Adjusted Net Revenue

     2,018        1,669        26.4   
  

 

 

   

 

 

   

 

 

 

Total Adjusted Net Revenue

     7,569        7,790        123.3   
  

 

 

   

 

 

   

 

 

 

Net Profit

     4,004        2,630        41.6   
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     468        572        9.1   

Other income

     (15     (6     (0.1

Other expenses

     11        58        0.9   

Foreign exchange gain

     (1,801     (775     (12.3

Foreign exchange loss

     915        1,485        23.5   

Interest income

     (3     (29     (0.5

Interest expenses

     78        52        0.8   

Income tax expenses

     738        652        10.3   

Share-based payments expenses

     62        136        2.2   

Gain from disposal of subsidiaries

     (33     —          —     
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     4,424        4,775        75.6   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     58.4     61.3     61.3

Net profit

     4,004        2,630        41.6   

Amortization of fair value adjustments(7)

     167        276        4.4   

Share-based payments expenses

     62        136        2.2   

Effect of taxation of the above items

     (32     (54     (0.9

Gain from disposal of subsidiaries

     (33     —          —     

Foreign Exchange loss/(gain) on June 2014 offering proceeds(8)

     (885     786        12.4   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit

     3,283        3,774        59.8   
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     57.65        62.44        0.99   

Diluted

     57.46        62.33        0.99   

Shares used in computing Adjusted Net Profit per share

      

Basic

     56,943        60,442        60,442   

Diluted

     57,139        60,547        60,547   

 


(1) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 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/(gain) on the US dollar amount, which we received at SPO.


QIWI plc.

Other Operating Data

 

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

Payment volume (billion)(3)(4)

     265.1        214.5        3.4   
  

 

 

   

 

 

   

 

 

 

E-commerce

     31.2        35.1        0.6   

Financial services

     79.6        67.0        1.1   

Money remittances

     62.5        46.7        0.7   

Telecom

     68.4        49.8        0.8   

Other

     23.5        15.9        0.3   
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(5)

     1,835.9        2,105.4        33.3   
  

 

 

   

 

 

   

 

 

 

E-commerce

     677.8        863.5        13.7   

Financial services

     233.1        357.5        5.7   

Money remittances

     546.5        586.7        9.3   

Telecom

     261.8        201.5        3.2   

Other

     116.8        96.3        1.5   
  

 

 

   

 

 

   

 

 

 

Payment average net revenue yield

     0.69     0.98     0.98
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.17     2.46     2.46

Financial services

     0.29     0.53     0.53

Money remittances

     0.87     1.26     1.26

Telecom

     0.38     0.40     0.40

Other

     0.50     0.60     0.60
  

 

 

   

 

 

   

 

 

 

Total average Net Revenue Yield

     0.95     1.24     1.24

Active kiosks and terminals (units)(6)(7)

     172,696        163,049        163,049   

Active Qiwi Wallet accounts (million)(8)

     16.7        16.5        16.5   

 


(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 6.5 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 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 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) The number of active kiosk and terminals for 3 months ended September 30, 2015 shown here differs from the financial statements for the nine months ended September 30, 2015 and reflect adjustments made to include Contact and Rapida physical points of service.
(8) 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

 

     Nine months ended  
     September 30, 2015(1)     September 30, 2016(1)     September 30, 2016  
     RUB     RUB     USD (2)  

Payment volume (billion)(3)(4)

     626.2        607.8        9.6   
  

 

 

   

 

 

   

 

 

 

E-commerce

     78.2        95.5        1.5   

Financial services

     168.6        191.1        3.0   

Money remittances

     116.4        118.9        1.9   

Telecom

     195.3        149.1        2.4   

Other

     67.8        53.2        0.8   
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(5)

     5,551.4        6,121.5        96.9   
  

 

 

   

 

 

   

 

 

 

E-commerce

     2,089.0        2,523.0        39.9   

Financial services

     1,033.7        1,093.0        17.3   

Money remittances

     1,278.9        1,594.1        25.2   

Telecom

     768.2        615.4        9.7   

Other

     381.7        296.0        4.7   
  

 

 

   

 

 

   

 

 

 

Payment average net revenue yield

     0.89     1.01     1.01
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.67     2.64     2.64

Financial services

     0.61     0.57     0.57

Money remittances

     1.10     1.34     1.34

Telecom

     0.39     0.41     0.41

Other

     0.56     0.56     0.56
  

 

 

   

 

 

   

 

 

 

Total average Net Revenue Yield

     1.21     1.28     1.28

Active kiosks and terminals (units)(6)(?)

     172,696        163,049        163,049   

Active Qiwi Wallet accounts (million)(8)

     16.7        16.5        16.5   

 

(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 or otherwise 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 6.5 billion respectively. Besides, certain reallocation of volumes between different market verticals shall be future earnings releases.
(2) Calculated using a ruble to U.S. dollar exchange rate of RUB 63.158 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of September 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) The number of active kiosk and terminals for 3 months ended September 30, 2015 shown here differs from the financial statements for the nine months ended September 30, 2015 and reflect adjustments made to include Contact and Rapida physical points of service.
(8) 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.
EX-99.2

Exhibit 99.2

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Exhibit 99.2

Corporate Overview

November 2016


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Cautionary Statement Regarding Forward

Looking Statements

“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements, including, without limitation, statements regarding our business strategy, expected growth of Visa QIWI Wallet, payment volume growth, and growth in the Company’s distribution network.

These forward looking statements are subject to 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 any 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, competition, a decline in average net revenue yield, fees levied on QIWI’s consumers, changes in regulation, QIWI’s ability to grow Visa QIWI Wallet, and QIWI’s ability to expand geographically.

The foregoing risk factors are not exhaustive. You should carefully consider the foregoing factors and other risks and uncertainties that affect the business of QIWI described under the caption “Risk Factors” in QIWI’s

Registration Statement on Form F-1 and in other reports QIWI files with the U.S. Securities and Exchange Commission. QIWI undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless QIWI is required to do so by law.


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QIWI’s Key Milestones and Track-record of Innovation

QIWI has been leading payments innovation in Russia and the CIS

Prepaid

Self-mobile Push QIWI FinTech

1999 2003 2006 Service 2008 2016+ SOVEST Future top-up Payments Wallet disruption kiosks cards

Key milestones of QIWI development

QIWI reaches Launch of 15 mln active SOVEST QIWI Bank VQW users joins the Acquisition of Contact and QIWI Mobil Group QIWI IPO on Rapida Wallet Nasdaq launched First Visa 2016 2015 QIWI Card 2014 issued 2013 QIWI brand 2012 established 2011 2010 2009 2008 2007


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QIWI is an Integrated Multi-channel Network Providing

Next Generation Payment Services

Self-Service Kiosks Money Remittance Electronic Wallet

Convert Cash Transfer Cash or Access and Pay with Electronic into “Electronic Money” Electronic Money Money Online

QIWI Enables Consumers and Merchants to Use and Accept Electronic Payments via highly synergetic omni channel infrastructure

Pay Bills Top Up Mobile Phone Shop Online/Via Get and Load a Mobile Prepaid Card Send Money Pay with Mobile Phone Multi Level Marketing Repay Loans Make Utility Send Social Media Payments Gifts Pay in online games Many More…


LOGO

 

With Massive Adoption, Brand Recognition and Ubiquitous Presence

16+

163k+ 12k+ 6k+ million

Kiosks and Terminals1 Active Wallet Accounts2 Merchants1 Agents1

58+ million customers using our network at least once a month

Over RUB71 billion cash and electronic payments going through our system monthly

1 On a 1 months basis 2 On a 12 months basis


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Offering a Broad Range of Channels and Interfaces

Kiosks and Visa Qiwi Qiwi Visa Money Merchant Terminals Wallet Card Remittance check out

   Ubiquitous    Pay for goods    Pay for any    Send money    Accept market presence and services goods and through money electronic online – mobile services remittance payment from a    Pay for goods app or web anywhere Visa companies broad customer and services cards are base offline in a    Send Money    Via card to card accepted convenient through various transfers and    Use the location channels   Use our Priority Qiwi Transfer convenient package app cabinet   Top Up the    Pay in retail with Wallet HCE technology   From Wallet to    Advertise    Wallet through our Send Money   Tie up cards and bank accounts   platforms In messenger apps with Qiwi   Settle invoices PayBoard


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Benefiting from Favorable Secular Trends

Favorable Secular Trends

   Russia and the CIS are primarily cash economies High Cash Usage

- c. 80 % Payments are and the need to yesterday digitize cash - 72% of card transactions are cash withdrawals1

   Rapid growth in online payments Fast Growth of Digital payment transaction

- volume to double by 2020 online payments today and reach 10% of consumer expenditures in Russia2 and e-commerce

   Increasing smartphone penetration promotes usage of e-services

- Smartphone penetration in Russia was estimated to reach

Mass adoption of

45%, compared to the geographies like the US where mobile devices tomorrow mobile penetration is as high as 72%3

- By 2018 smartphone penetration in Russia is forecasted to reach 54%4

QIWI is Well-Positioned to Continue to Benefit from High Growth Secular Trends in the Markets it Serves

1Central Bank of Russia data as of 30.06.2016 3 As of 2015, Spring 2015 Global Attitudes Survey; Q71, Q72 2Source: Statista; data as of June 2016 4 ZenithOptimedia’s annual New Media Forecast


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We Services a Wide and Growing Range of Markets

Resilient business model Diversified payment volume and net revenue mix

   Highly resilient and diversified volume Payment volume mix

E-Commerce Financial service money remittances Telecom other

base 8% 9% 11% 9%

   Adaptive monetization strategies 25%

29% 39% 47%

   Innovation-driven highly technological 20%

19%

products 6% 10%

31%

   Opportunities to increase market share 27% 30% 28% in current verticals through better and

11% 12% 13% 16%

more diversified service offerings to

2013 2014 2015 9M 2016

merchants and customers

Adjusted net revenue mix

e-Commerce Financial services

7% 6% 7% 5% 10% 18% 13% 31% 26% 15% 24% 10%

18%

30% 18% 23%

Money remittances Telecom

38% 41% 28% 31%

2013 2014 2015 9M 2016


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QIWI is Focused on Disrupting the Market with Omni Channel Infrastructure

Access, Obtain and Use Funds in an affordable, convenient and transparent way

©

Top up with Tie Bank Get 3rd party Use Installment Accept P2P Receive Gains Cash accounts and loans Products transfers debit cards

IN

Innovative OUT Service Platform

Pay for goods and Pay for goods and Remit money Pay Bills Invest Funds services online services Offline


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SOVEST

PRODUCT

SOVEST is a first large-scale payment-by installments card system in Russia developed to help consumers to get easy and transparent access to funds and purchase a wide range of goods and services they need

SOVEST business model presumes that the Lender earns money from the retail partners sharing their sales profits with SOVEST and not from the customers paying interest, while Customer gets Shops with the Repays in 1 to

Lender carries all non-payment risks an installment partnered 12 equal card merchant installments

Customer case Merchant case

Accessible credit card proxy – funds for necessary goods, New customers packaged in a solution that excels all current market Incremental purchases – easily available credit for offerings customers will lead to impulse purchases and increase

Advantages compared to traditional credit cards: RFM factors

  No interest on customer side, no overpayments Solution for under credited retail segments - our product  Revolving credit limit allows segments such as fast moving consumer goods and  Single-time credit limit setup with multiple usage petrol stations to provide their customers with a credit  Easy to understand installment usage opportunity

Advantages compared to payment-by-installments: Free marketing – partners will get additional marketing

  Accepted in all major retail segments exposure as part of our marketing efforts

  One-stop credit approval Merchant gets 100% revenue at a time of transaction, paying back the commission later


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SOVEST

USE CASE

Potential estimated market size – over 7 million users by 2025

Short-term credit Lower credit limits Average ticket

1 – 12 50k ₱ Moscow 3 200 ₱ average basket months/installments 35k ₱ Regions across partners pool

Expected customers behavior types

Savers Smart Shoppers Unscheduled

Earning interest on own Shopping more without Accidental shopping : funds in deposit while overpaying banks on credit necessities replacement, paying with an installment cards gifts and presents card

Partnered Merchants - large retailers and retail chains including:

Consumer Electronics Appliances & Fashion and Apparel Restaurants and Gas Consumer Staples Stations


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SOVEST

MARKET OPPORTUNITY & INTERNATIONAL PEERS

Market Potential 2015 2020F 2025F

  Russian market shows pessimistic macro GDP dynamic1 -3.7% 1.9% 3.8% trends: stagnating GDP, shrinking 2 consumer disposable income Total population (mm) 146 148 150 Retailers strive to maintain  turnover Economically active population3 82 80 78   Customers are in need of low cost funding Creditable population4 57 58 58 and don’t trust the banking system thus (total available market) prefer zero cost credit, which is the 4 cheapest way to maintain their Reachable clients 44 47 49 consumption level Share of reachable audience 9% 15%  Alike products have great success in Our target 4 8 Belarus, Kazakhstan and Latin America

Interest funded by both Interest funded by merchant consumer and merchant Mid & SE

Belarus Azerbaijan Serbia Australia Turkey Brazil Asia

Installment cards Installment cards Installments 0% installment Banks offer interest- Installment cards 60% of Brazilians account for 25% currently account represents an plans are formalized free installment account for 35% of have been or still share of sales at for 80% of total additional service, as «Promotional options in line with total credit card are in installment partnered credit cards in which may (but not offers» other benefits amounts debt merchants circulation necessarily) be used

Key players

MTBank Unibank Komercijalna banka Latitude Group Saudi Arabia, SABB Gencallar Banco do Brazil VTB Belarus Bank of Baku ad Beograd (ex-GE Money) Hong Kong, HSBC Garanti Bank Itaú YapiKredi Bank HSBC Singapore, OCBC Finansbank Bradesco Bank Respublika ANX Bank Philippines, Citibank İş Bankasĺ Caixa

1 NRU-HSE Development Center Consensus Forecast, August 2016 3Demoscope

2 Demographic Policy of the Russian Federation until 2025 4Company Estimates


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SOVEST

KEY FIGURES

Why QIWI?

   Existing banking infrastructure – the

Forecast 2020 project is made on the QIWI bank infrastructure decreasing time-to- Credit portfolio, (RUB bn), EOP 35-40 market (QIWI Bank serves as the Average credit duration, months 2 – 3 issuing bank) POS transactions volume, (RUB bn) 250-300

   Well known brand name, existing Cost of Risk 10% – 12% consumer base – marketing for clients Target Net Commission 6-7% already familiar with QIWI will make Target Net Revenue, (RUB bn) 15-20 amassing initial client base faster Target Adjusted EBITDA1 margin 30-35%

   Synergies with existing business –installment payments can be made via

QIWI Wallet and/or kiosk network Expected Cost 2016, (RUB mm) 200

   Technology and Payments expertise –

Net Income Effect 2017, (RUB bn) -1.4 experience in customer focused payment solutions (mobile app, web, processing, etc.)

1 Target Adjusted EBITDA margin is calculated based on Net Revenue


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Financial Overview


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Key Financial Indicators for 2015 and 9M 20161

Payment Volume Average Net Revenue Yield2 Adjusted Net Revenue3

(RUB bn) (RUB mm)

10 228

859

8 836

2 706

7 790

7 569

645 1,37% 2 321 626

24% CAGR

3% decline

21% CAGR

3% growth

608 1 669 1,28% 6 168 2 018 561 1,21% 1,19% 1,10% 1 848

7 522

6 515

6 121

5 551

4 320

2013 2014 2015 9M 2015 9M 2016 2013 2014 2015 9M 2015 9M 2016 2013 2014 2015 9M 2015 9M 2016

1 Including Contact and Rapida financial results starting June 2015. Payment net revenue

2 Defined as adjusted net revenue divided by total payment volume. Other net revenue

3 Calculated by subtracting cost of revenue (exclusive of depreciation and amortization) from revenue and adding back compensation to employees and related taxes.


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High Operating Leverage

Low incremental opex (as % of net revenue)1 SG&A structure

1,875 bps of Operation Efficiency

(RUB mm)

3 469

3 082 63,6%

1 068

2 678

742

55,6%

2 323

763 242 2 197 51,7% 513 553

24% 465 21%

172

45,5% 100 5% 44,9% 178 8% 648 400 478 41,6% 20% 461 21% 468 38,7%

1 511

1 343 1 349 48% 53%

1 124 1 171

2011 2012 2013 2014 2015 9M 2015 9M 2016 2013 2014 2015 9M 2015 9M 2016

Payroll, related taxes and other Office related expenses(2) personnel expenses

Advertising and related expenses Other(3)

1Operating expenses defined as adjusted net revenue less adjusted EBITDA. Represents % of SG&A

2 Includes rent of premises and related utility expenses and office maintenance expenses.

3 Includes bad debt expense, telecommunication and internet expenses, travelling and representation expenses, professional fees, other tax expenses, bank services, offering expenses and other operating expenses.


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Adjusted EBITDA and EBITDA Margin

Adjusted EBITDA1

47% CAGR

8% growth

(RUB mm) Margin

5 640

61,3%

4 818 58,4% 4 775 55,1%

4 424 54,5%

48,3%

2 978 44,4%

1 851 36,4%

1 183

2011 2012 2013 2014 2015 9M 2015 9M 2016

¹ Adjusted EBITDA is defined as net profit before income tax expense, interest expense, interest income and depreciation and amortization, as further adjusted for (loss) gain from discontinued operations, share of loss of an associate, foreign exchange (loss) gain, net, change in fair value of derivative financial assets, other expenses, other income, gain from disposal of subsidiaries, corporate costs allocated to discontinued operations and gain from bargain purchase. Includes impact of revenue derived from inactive accounts.


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Sustainable and Compelling Earnings Growth

Adjusted Net Profit1

(RUB mm)

4 142

3 774

3 496

3 283

2 174

1 306

721

2011 2012 2013 2014 2015 9M 2015 9M 2016

55% CAGR 15% growth

¹ Defined as net profit excluding loss on discontinued operations (net of tax), corporate costs allocated to discontinued operations, amortization of fair value adjustments, gain on bargain purchase, gains on disposals, and the effects of deferred taxation on those excluded items.


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Appendix


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QIWI’s Product Strategy

Access & Obtain Funds Pay & Remit “Bank for un- and under-banked”

Pay for goods and services via online and offline channels Get easier and friendlier access to Remit money cheaper funds

Invest & Gain Funds Innovate

Use cutting edge technological

Benefit from technological services to get your money advances and lead the market working


LOGO

 

QIWI is Focused on Disrupting the Market with Omni Channel Infrastructure

Expand the suite of services Attract unbanked and underbanked customers

   Low barriers to start using the    New Services for customers service   New Apps and web optionality   Focus on Point-of-Market-Entry   New Funding Sources   P2P infrastructure   Expansion of distribution channels    Roll out of successful international models to our core market

Innovate through R&D Expand ecosystem for SMBs

   R&D and technological angle   Strategic acquisitions of market

   Offer a broad range of payment share or loyalty through organic options development and M&A

   Enrich and expand user base   Search for synergies   Develop and spread ancillary    Expansion of distribution channels services   QIWI ventures


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Pay and Remit

Payments Money Remittance

   Develop and innovate core products Technology is:   Develop and promote leveraging existing network different money remittance

  Affordable

   Offer new services and increased channels functionality  Convenient   Optimize existing    Introduce additional apps for targeted infrastructure  Transparent categories of payments for example:    Offer advanced technological   Car payments – taxes, insurance, solutions for money fines transfers of any size and    Home payments – utility bills, nature internet bills, taxes, insurance

E-money payments in Russia are forecasted to

   Offer technological advancements on growth with a CAGR of 10%1 consumer and merchant sides of our (RUB bn) network 1 144

990 1 071

   Increase loyalty and usage of existing 901

805

customers 705   Increasing user satisfaction

2015 2016E 2017E 2018E 2019E 2020E

1 Source: J’son and Partners; data as of June 2016


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Access and Obtain Funds

“Bank for un- and under- banked”

QIWI as a source of funds for the customer Technology is:

As market is moving towards shared 45% Of Russians   Affordable economy we see that we can provide participate in   Convenient customers with more affordable, convenient, transparent, honest and informal lending1  Transparent engaging instrument to finance their daily needs 35% gave out a

Focusing on our core small check short loan – RUB 18.5k term markets and leveraging existing per year on network and infrastructure we are able to average1 provide funds to our customers through different online channels: 28% took a loan –   Installments RUB 20.1K per year    Platform for banks and other financial on average1 institutions

1 Source: NAFI Analytical Center, Cooperation to increase the level of financial literacy and financial education of Russian population, July 2016


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Invest and Gain Funds

QIWI as a technological investment tool Technology is:

With more ways to save and earn we want Although the number of   Affordable to give small check retail consumers MOEX retail clients has

  Convenient

opportunity to participate in larger reached nearly 1 million financial markets, invest, manage funds unique accounts in 2015 it   Transparent and save online. is still less than 1% of working-age population in By leveraging our existing platform, Russia partnering with other market players and engineering proprietary services we aim to provide our customers with additional Number of MOEX unique users – physical persons, residents1 sources of funds.

(in thousands)

   Trade with QIWI Exchange

982,0

   Use savings options 906,4

838,2 796,1 751,1

   P2P platform 695,8   Invest with QIWI crowdfunding

platform 2010 2011 2012 2013 2014 2015

1 Source: MOEX Group, NAUFOR research


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Innovate

QIWI as a fintech innovator Technology is:

We want to envision the future before anyone QIWI Venture serves as a   Affordable else does so we believe it is important to focus on platform to tap the whole Convenient

R&D to optimize existing infrastructure and create range of new cutting edge new innovative solutions. projects, technologies and   Transparent ideas We focus on the following fields:   Leadership in crypto and block chain technological solutions   Shipping and delivery integration   New generation self service kiosks   New generation IT-driven scoring models utilizing our massive consumer data


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SOVEST

Risk process — credit limits approval

3rd stage (2017) IMPLEMENTED

+

RR

Credit reports from Credit

10% Own Scoring systems Bureaus Mobile operators Manual verification Geolocations RR QIWI transaction Scores from Credit Bureau 30%

RR

SAS Algorithms 20% +AR=10% +AR=5%

–COR (DR)=3-5%

Antifraud systems and scores from Credit Bureau, RR

Migration Department, 10% Usher Department Social Links

COR (DR)=15% COR (DR) 15% COR (DR) 10-12%% AR=30% AR=40% AR=45%

RR – Reject Rate AR – Approval Rate COR – Cost of Risk DR – Default Rate