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 August 19, 2020

 

 

QIWI plc

12-14 Kennedy Ave.

Kennedy Business Centre, 2nd Floor, Office 203

1087 Nicosia Cyprus

(Address of principal executive offices)

 

 

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

Form 20-F  ☒            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):

EXCEPT FOR REFERENCES TO “TOTAL NET REVENUE”, “PS PAYMENT REVENUE”, “PS PAYMENT ADJUSTED NET REVENUE”, “PS OTHER REVENUE”, “PS OTHER ADJUSTED NET REVENUE”, “PAYMENT AVERAGE ADJUSTED NET REVENUE YIELD”, “CFS SEGMENT NET REVENUE YIELD”, “ADJUSTED EBITDA”, “ADJUSTED EBITDA MARGIN”, “ADJUSTED NET PROFIT”, AND “ADJUSTED NET PROFIT PER SHARE”, EXHIBIT 99.1 TO THIS REPORT ON FORM 6-K IS INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM S-8 (FILE NO. 333-190918; FILE NO. 333-212441) OF QIWI PLC AND IN THE OUTSTANDING PROSPECTUS CONTAINED IN SUCH REGISTRATION STATEMENTS.


Exhibits

    
99.1    “QIWI Announces Second Quarter 2020 Financial Results” press release dated August 19, 2020
99.2    Interim condensed consolidated financial statements (unaudited) of QIWI plc for the six months ended June 30, 2020
99.3    Acknowledgment letter of Ernst & Young LLC


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 19, 2020     By:  

/s/ Varvara Kiseleva

      Varvara Kiseleva
      Interim Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

QIWI Announces Second Quarter 2020 Financial Results

Second Quarter Total Net Revenue Increases 23% to RUB 6,839 Million and Adjusted Net

Profit Increases 40% to RUB 2,756 Million or RUB 44.19 per diluted share

QIWI upgrades 2020 Guidance

Board of Directors Approves Dividends of 33 cents per share

NICOSIA, CYPRUS – August 19, 2020 – QIWI plc (NASDAQ: QIWI) (MOEX: QIWI) (“QIWI” or the “Company”) today announced results for the second quarter ended June 30, 2020.

Second Quarter 2020 Operating and Financial Highlights

 

   

Total Net Revenue increased 23% to RUB 6,839 million ($97.8 million)

 

   

Payment Services Segment Net Revenue increased 5% to RUB 5,397 million ($77.2 million)

 

   

Adjusted EBITDA increased 48% to RUB 3,905 million ($55.8 million)

 

   

Adjusted Net Profit increased 40% to RUB 2,756 million ($39.4 million), or RUB 44.19 per diluted share

 

   

Payment Services Segment Net Profit increased 1% to RUB 3,243 million ($46.4 million) or RUB 52.01 per diluted share

 

   

Total Payment Services volume decreased 6% to RUB 346.8 billion ($5.0 billion)

“Today I’m glad to share our second quarter 2020 financial results. This quarter we demonstrated robust performance notwithstanding the negative impact of the COVID-19 pandemic and associated lockdown measures imposed globally on our business and operations throughout most of the quarter. Our Payment Services segment showed solid dynamics despite challenging market environment and delivered 5% segment net revenue growth. April and May were the most challenging months for us so far while in June we have started to see a strong recovery in our key markets and niches. We believe that the performance of our payment services business demonstrates the resilience of our ecosystem as well as the value and relevance of the digital solutions we have developed to date and aim to develop further,” said Boris Kim, QIWI’s chief executive officer. “Further, this quarter we focused on optimizing our operations and loss-making projects. We have sold our SOVEST project to Sovcombank with the final transaction valuation exceeding our initial expectations and are finalizing the wind-down of Roketbank. We strive to further improve the efficiency of our operations across all key segments and projects. At the same time, we continue to focus on our payment services business as well as on developing and leveraging our highly adaptive and consumer-oriented payment services ecosystem. We aim to grow it further by targeting our core niches and areas of expertise and creating new use cases well fitted to serve our clients, merchants and partners. Simultaneously, we aim to expand our B2B proposition through projects like Factoring Plus and Flocktory. Even in these challenging times, we see many opportunities both in the payment space and in the adjacent markets and I believe we are well positioned to continue strengthening our ecosystem with the ultimate goal of securing our long-term growth prospects.”


Second Quarter 2020 Results

Total and Segment Net Revenues: Total Net Revenue for the quarter ended June 30, 2020 was RUB 6,839 million ($97.8 million), an increase of 23% compared with RUB 5,563 million in the prior year. The increase was mainly resulted from Rocketbank Segment Net Revenue growth driven primarily by the revenue generated from the loyalty program termination, as well as by Payment Services segment and Consumer Financial Services Segment Net Revenue growth.

Payment Services (PS) Segment Net Revenue for the quarter ended June 30, 2020 was RUB 5,397 million ($77.2 million), an increase of 5% compared with RUB 5,158 million in the prior year.

PS Payment Adjusted Net Revenue was RUB 4,609 million ($65.9 million), an increase of 4% compared with RUB 4,412 million in the prior year. PS Payment Adjusted Net Revenue growth was predominantly driven by the improvement of the Payment Average Adjusted Net Revenue Yield resulting primarily from higher net revenue yield in E-commerce market vertical offset by the overall decline in volume.

PS Other Adjusted Net Revenue, which is principally composed of revenue from fees for inactive accounts and unclaimed payments, interest revenue, revenue from overdrafts provided to agents, and advertising, was RUB 788 million ($11.3 million), an increase of 6% compared with RUB 746 million in the prior year. Fees for inactive accounts and unclaimed payments for the second quarter ended June 30, 2020 were RUB 501 million ($7.2 million) compared with RUB 471 million for the corresponding period in the prior year. PS Other Adjusted Net Revenue excluding revenue from fees for inactive accounts and unclaimed payments increased 4% compared with the same period in the prior year to RUB 287 million predominantly driven by cost-optimization measures including lower call-center, SMS and Voicemails expenses.

Consumer Financial Services (CFS) Segment Net Revenue which is composed of revenue from the SOVEST project for the quarter ended June 30, 2020 was RUB 437 million ($6.2 million) compared with RUB 283 million in the second quarter of the prior year driven by higher adoption of consumer paid value added options as well as overall growth of the project including increase of the loan portfolio.

Corporate and Other Category (CO) Net Revenue includes: (i) net revenue from cash and settlement services related to the operations of the Tochka project1; (ii) net revenue from account receivable financing and digital bank guarantees products of Factoring PLUS project; (iii) net revenue from marketing solution products of Flocktory; and (iv) net revenue from other start-up projects. For the quarter ended June 30, 2020 Corporate and Other Category Net Revenue was RUB 496 million ($7.1 million) compared with RUB 254 million in the second quarter of the prior year. Category Net Revenue dynamics was driven by primarily the following factors:

 

   

Tochka Net Revenue for the quarter ended June 30, 2020 was RUB 166 million ($2.4 million) compared with RUB 186 million in the second quarter of the prior year. Tochka Net Revenue decline primarily resulted from a decrease in the number of active clients due to the macroeconomy slow-down triggered by a COVID-19 outbreak.

 

   

Factoring Net Revenue for the quarter ended June 30, 2020 was RUB 204 million ($2.9 million) compared with RUB 53 million in the second quarter of the prior year. Factoring Net Revenue growth resulted predominantly from the scaling of the project including expansion of bank guarantees and factoring portfolios.

 

1 

Starting from the first quarter 2020 we present Tochka JV results as part of the Corporate and Other Category


   

Flocktory Net Revenue for the quarter ended June 30, 2020 was RUB 117 million. Flocktory was considered as an associate before it was consolidated as a part of the QIWI Group in the fourth quarter of 2019.

Adjusted EBITDA: For the quarter ended June 30, 2020, Adjusted EBITDA was RUB 3,905 million ($55.8 million), an increase of 48% compared with RUB 2,639 million in the prior year. The adjusted EBITDA increase was driven primarily by Total Net Revenue growth as well as a decline in selling, general and administrative expenses to RUB 695 million for the quarter ended June 30, 2020 as compared to RUB 1,230 million for same period in the prior year resulting from a decrease in advertising, client acquisition and related expenses driven predominantly by the divestiture of SOVEST and Rocketbank projects. Adjusted EBITDA growth was offset by an increase in personnel expenses (excluding effect of share-based payments) to RUB 1,949 million for the quarter ended June 30, 2020 as compared to RUB 1,543 million for same period in the prior year mainly as a result of an increase of Payment Services segment personnel expenses, consolidation of Flocktory as well as Rocketbank redundancy compensations. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of Total Net Revenue) was 57.1% for the quarter ended June 30, 2020 compared with 47.4% for the same period in the prior year.

Adjusted and Segment Net Profit: For the quarter ended June 30, 2020, Adjusted Net Profit (Total Segment Net Profit) was RUB 2,756 million ($39.4 million), an increase of 40% compared with RUB 1,965 million in the prior year. The growth of Adjusted Net Profit was primarily driven by the same factors impacting Adjusted EBITDA increase offset by higher income tax expenses as well as an increase in foreign exchange loss2.

For the quarter ended June 30, 2020, Payment Services Segment Net Profit was RUB 3,243 million ($46.4 million), an increase of 1% compared with RUB 3,206 million in the prior year driven by Payment Services Segment Net Revenue growth offset by an increase in personnel expenses (excluding effect of share-based payments) and an increase in Payment Services Segment foreign exchange loss.

The Consumer Financial Services Segment Net Loss for the second quarter 2020 was RUB 134 million ($1.9 million) as compared to a Net Loss of RUB 435 million for the same period of the prior year resulting primarily from Segment Net Revenue growth as well as a decrease in selling, general and administrative expenses, primarily related to lower marketing and consumer acquisition costs offset by an increase in credit loss expenses predominantly due to portfolio expansion.

Rocketbank Segment Net Profit was RUB 44 million ($0.6 million), as compared to the Net Loss of RUB 511 million in the prior year resulting mainly from Net Revenue growth driven primarily by revenue generated from the loyalty program termination and well as a decrease in selling, general and administrative expenses, predominantly related to lower marketing and consumer acquisition costs.

Corporate and Other Category Net Loss includes: (i) net profit/loss from the Tochka JV operations; (ii) net profit/loss of Factoring PLUS project; (iii) net profit/loss of the Flocktory project; (iv) net profit/loss from other start-up projects, and (v) Corporate expenses. Corporate and Other Category Net Loss for the second quarter 2020 was RUB 397 million compared to a Net Loss of RUB 295 million for the same period of the previous year. The dynamic of CO category Net Loss was driven primarily by the following factors:

 

   

Corporate Net Loss for the second quarter of 2020 was RUB 543 million compared with RUB 242 million for the same period of the previous year;

 

2 

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 proceeds


   

Tochka Net Profit for the second quarter of 2020 was RUB 165 million ($2.4 million) compared with RUB 16 million in the same quarter of the previous year. Tochka Net Profit increase resulted from higher equity pick-up primarily driven by the growth and development of the Tochka business despite challenging operating environment.

 

   

Factoring Plus Net Profit for the second quarter of 2020 was RUB 94 million ($1.3 million) compared with RUB 18 million for the same period of the previous year. Factoring Plus Net Profit growth was mainly driven by project Net Revenue increase.

Payment Services Other Operating Data: For the quarter ended June 30, 2020, Payment Services Segment payment volume was RUB 346.8 billion ($5.0 billion), a decrease of 6% compared with RUB 370.8 billion in the prior year. The decrease in payment volume was primarily driven by decline in Financial Services market vertical offset by growth in Money Remittances market vertical volume. Payment Average Adjusted Net Revenue Yield was 1.33%, increase of 14 bps as compared with 1.19% in the prior year primarily driven by an increase in E-commerce market vertical Payment Average Adjusted Net Revenue Yield.

Payment Services Segment Net Revenue Yield was 1.56%, an increase of 17 bps as compared with 1.39% in the prior year.

The number of active kiosks and terminals was 118,455 including Contact and Rapida physical points of service and decreased by 13% compared with the prior year. The number of our kiosks and terminals is generally decreasing as market evolves towards higher share of digital payments, moreover our physical distribution network was negatively affected by the spread of COVID-19 pandemic and corresponding lockdown measures that limited users’ access to certain retail locations as well as the overall activity of the population. Nevertheless, we believe that our physical distribution network remains an important part of our infrastructure. The number of active Qiwi Wallet accounts was 20.9 million as of June 30, 2020, a decrease of 0.9 million, or 4%, as compared with 21.8 million as of June 30, 2019 primarily resulting from the introduction of new limitations on the anonymous wallets and consequent optimization of certain transaction processes, change of inactivity term from 6 to 12 months and enhancement of certain KYC, identification and compliance procedures. Such decline did not substantially impact our financial or operating performance due to increasing diversification of our product proposition and operating models.

Recent Developments

Rocketbank Winding down: In March 2020, the Board of Directors decided to wind-down Rocketbank operations. We have commenced this process and are currently proceeding in accordance with the initial wind-down plan. As part of the measures we have taken to wind-down Rocketbank project, we have terminated marketing activities (including cancelation of the Rocketbank loyalty program), significantly increased tariffs, and are currently reducing the headcount of the project. We have seen a significant decline in the number of the Rocketbank customers and believe that termination of the current Rocketbank service offering will be finalized shortly. At the same time, we continue to review the most efficient ways to reuse or dispose of the Rocketbank assets, including piloting certain projects earlier developed in Rocketbank in our Payment Services Segment particularly as part of our B2B2C product pipeline. As of August 1, 2020 we have substantially completed the process of Rocketbank B2C operations wind down. The expenses associated with piloting certain B2B2C products in our Payment Services Segment including predominantly personnel expenses will be attributed to the Payment Services Segment going forward.


Sale of Sovest project: On July 13, 2020 we completed the sale of the SOVEST consumer lending project to Sovcombank. In connection with this transaction the Company assigned claims held against SOVEST customers (the portfolio of instalment card loans) to Sovcombank with a gross carrying amount of approximately RUB 8 billion and net amount of approximately RUB 6.4 billion (under IFRS) as well as certain other assets related to SOVEST project for a cash consideration of RUB 5.8 billion for such claims and assets including a partial reimbursement of related redundancy costs. We have incurred a pre-tax loss on disposal of the SOVEST project in the amount of RUB 0.7 billion, which is better than our initial expectations. Under the terms of sale certain other adjustments may occur until the end of 2020, however, we do not believe that such adjustments will materially affect the overall deal value as well as associated loss on disposal.

Gross carrying amount and net amount of loan portfolio presented earlier, were calculated in accordance with statutory accounts based on Central Bank of Russian Federation rules while the corresponding amounts presented above were calculated in accordance with IFRS. The difference between loan portfolio data presented earlier and IFRS data above is related to the difference between statutory accounts and IFRS.

Dividend: In March 2020, the Board of Directors has approved a target dividend payout ratio for 2020. In accordance with the decision of the Board of Directors, the Company aims to distribute at least 50% of Group Adjusted Net Profit for 2020.

Following the determination of the second quarter 2020 financial results and taking into consideration our current operating environment, our Board of Directors approved a dividend of USD 33 cents per share. The dividend record date is September 22, 2020, and the Company intends to pay the dividend on September 24, 2020. The holders of ADSs will receive the dividend shortly thereafter.

The Board of Directors reserves the right to distribute the dividends on a quarterly basis, as it deems necessary so that the total annual payout is in accordance with the target range provided, though the payout ratios for each of the quarters may vary and be outside of this range.

It remains the long-term intention of the Company to distribute all excess cash to the shareholders.

2020 Guidance3

QIWI upgrades its guidance in respect of 2020 outlook:

 

   

Total Net Revenue is expected to increase by 7% to 15% over 2019;

 

   

Payment Services Segment Net Revenue is expected to increase by 3% to 10% over 2019;

 

   

Adjusted Net Profit is expected to increase by 35% to 50% over 2019.

For the purpose of the guidance in respect of 2020 outlook we would like to outline the following considerations:

The outbreak of the COVID-19 strain of coronavirus and associated responses from various countries around the world is likely to negatively affect consumer demand across the globe and across industries, and there is the potential for COVID-19 and responses to it to cause a global recession. At this moment we are not able to accurately estimate the potential impact of COVID-19 on our business. In addition, it is currently unclear how much consumer demand will be negatively affected by the outbreak of COVID-19 and what effect the outbreak of COVID-19 will have on the macroeconomic environment, as a whole. The full impact remains uncertain and will depend on the length and severity of the effect of the coronavirus on economic activity in our markets. The full scope of the negative impact that the abrupt decline in oil prices and resulting devaluation of the ruble may have on the Russian economy also remains unclear but has the potential to be very significant. Our outlook reflects our current views and expectations only and is based on the trends we see as of the day of this report. If such trends were to deteriorate further the impact on our business and operations could be more severe than currently expected. We continue to monitor the situation closely.

 

3 

Guidance is provided in Russian ruble


The Company reserves the right to revise guidance in the course of the year or when additional information regarding the effect of the ongoing events becomes available.

Earnings Conference Call and Audio Webcast

QIWI will host a conference call to discuss second quarter 2020 financial results today at 8:30 a.m. ET. Hosting the call will be Boris Kim, chief executive officer, Andrey Protopopov, chief executive officer of Payment Services Segment, and Varvara Kiseleva, interim 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 (844) 512-2921 or +1 (412) 317-6671 for international callers; the pin number is 13707940. The replay will be available until Wednesday, September 2, 2020. 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 and financial services in Russia and the CIS. It has an integrated proprietary network that enables payment services across online, mobile and physical channels. It has deployed over 20.9 million virtual wallets, over 118,000 kiosks and terminals, and enabled merchants and customers to accept and transfer over RUB 116 billion cash and electronic payments monthly connecting over 32 million consumers using its network at least once a month. QIWI’s consumers can use cash, stored value and other electronic payment methods in order to pay for goods and services or transfer money across virtual or physical 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 net revenue, adjusted net profit and net revenue yield, dividend payments, payment volume growth, growth of physical and virtual distribution channels, trends in each of our market verticals, and statements regarding the divestiture of non-core investments, including Rocketbank as well as the statements regarding the development of other new projects. 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, growth in each of our market verticals, competition, the introduction of new products and services and their acceptance by consumers, QIWI’s ability to estimate the market risk and capital risk associated with new projects, a decline in net revenue yield, regulation, QIWI’s ability to grow physical and virtual distribution channels, cyberattacks and security vulnerabilities in QIWI’s products and services, QIWI’s ability to expand geographically, the risk that new projects will not perform in accordance with its expectations 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

Investor Relations

+357.25028091

ir@qiwi.com


QIWI plc.

Consolidated Statement of Financial Position

(in millions)

 

     As of December 31,
2019 (audited)
     As of June 30,
2020 (unaudited)
     As of June 30,
2020 (unaudited)
 
     RUB      RUB      USD(1)  

Assets

        

Non-current assets

        

Property and equipment

     2,346        2,238        32  

Goodwill and other intangible assets

     11,316        11,010        157  

Investments in associates

     1,118        1,357        19  

Long-term debt securities and deposits

     4,015        3,246        46  

Long-term loans

     265        268        4  

Other non-current assets

     83        111        2  

Deferred tax assets

     217        225        3  
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     19,360        18,455        264  
  

 

 

    

 

 

    

 

 

 

Current assets

        

Trade and other receivables

     6,162        4,853        69  

Short-term loans

     11,419        3,360        48  

Short-term debt securities and deposits

     1,136        1,059        15  

Prepaid income tax

     259        93        1  

Other current assets

     917        928        13  

Cash and cash equivalents

     42,101        33,629        481  

Assets held for sale

     123        6,596        94  
  

 

 

    

 

 

    

 

 

 

Total current assets

     62,117        50,518        722  
  

 

 

    

 

 

    

 

 

 

Total assets

     81,477        68,973        986  
  

 

 

    

 

 

    

 

 

 

Equity and liabilities

        

Equity attributable to equity holders of the parent

        

Share capital

     1        1        0  

Additional paid-in capital

     1,876        1,876        27  

Share premium

     12,068        12,068        173  

Other reserves

     2,576        2,600        37  

Retained earnings

     10,557        12,305        176  

Translation reserve

     289        431        6  
  

 

 

    

 

 

    

 

 

 

Total equity attributable to equity holders of the parent

     27,367        29,281        419  

Non-controlling interests

     70        60        1  
  

 

 

    

 

 

    

 

 

 

Total equity

     27,437        29,341        419  
  

 

 

    

 

 

    

 

 

 

Non-current liabilities

        

Long term debt

     1,545        1,451        21  

Long-term lease liability

     1,017        1,105        16  

Long-term customer accounts

     444        320        5  

Other non-current liabilities

     45        40        1  

Deferred tax liabilities

     749        922        13  
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     3,800        3,838        55  
  

 

 

    

 

 

    

 

 

 

Current liabilities

        

Trade and other payables

     27,295        24,283        347  

Customer accounts and amounts due to banks

     21,519        9,556        137  

Short-term lease liability

     340        385        6  

VAT and other taxes payable

     184        131        2  

Other current liabilities

     902        522        7  

Liabilities directly associated with the assets held for sale

     —          917        13  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     50,240        35,794        512  
  

 

 

    

 

 

    

 

 

 

Total equity and liabilities

     81,477        68,973        986  
  

 

 

    

 

 

    

 

 

 

 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in millions, except per share data)

 

     Three months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD(1)  

Revenue:

     9,234       10,114       144.6  

Payment processing fees

     7,543       7,796       111.4  

Interest revenue calculated using the effective interest rate

     805       707       10.1  

Fees from inactive accounts and unclaimed payments

     471       501       7.2  

Other revenue

     415       1,110       15.9  

Operating costs and expenses:

     (6,524     (6,376     (91.1

Cost of revenue (exclusive of items shown separetely below)

     (3,948     (3,679     (52.6

Selling, general and administrative expenses

     (897     (629     (9.0

Personnel expenses(2)

     (1,359     (1,709     (24.4

Depreciation and amortization

     (333     (312     (4.5

Credit loss (expense)/recovery

     13       (1     (0.0

Impairment of non-current assets

     —         (46     (0.7

Profit from operations

     2,710       3,738       53.4  
  

 

 

   

 

 

   

 

 

 

Share of gain/(loss) of an associate and a joint venture

     8       107       1.5  

Other income and expenses, net

     6       (7     (0.1

Foreign exchange gain

     132       798       11.4  

Foreign exchange loss

     (190     (1,090     (15.6

Interest income and expenses, net

     4       (31     (0.4
  

 

 

   

 

 

   

 

 

 

Profit before tax from continuing operations

     2,670       3,515       50.2  

Income tax expense

     (527     (708     (10.1
  

 

 

   

 

 

   

 

 

 

Net profit from continuing operations

     2,143       2,807       40.1  
  

 

 

   

 

 

   

 

 

 

Discontinued operations

      

Loss from discontinued operations

     (459     (970     (13.9
  

 

 

   

 

 

   

 

 

 

Net profit

     1,684       1,837       26.3  
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     1,672       1,816       26.0  

Non-controlling interests

     12       21       0.3  

Other comprehensive income

      

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

      

Foreign currency translation:

      

Exchange differences on translation of foreign operations

     (46     (33     (0.5

Debt securities at fair value through other comprehensive income (FVOCI):

      

Net gains arising during the period, net of tax

     —         40       0.6  

Net gains recycled to profit or loss upon disposal

     —         (25     (0.4

Total other comprehensive income/(loss), net of tax

     (46     (18     (0.3
  

 

 

   

 

 

   

 

 

 

Total comprehensive income, net of tax

     1,638       1,819       26.0  
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     1,627       1,798       25.7  

Non-controlling interests

     11       21       0.3  

Earnings per share:

      

Basic, profit attributable to ordinary equity holders of the parent

     27.13       29.24       0.42  

Diluted, profit attributable to ordinary equity holders of the parent

     26.87       29.13       0.42  

Earnings per share for continuing operations

      

Basic, profit from continuing operations attributable to ordinary equity holders of the parent

     34.58       44.83       0.64  

Diluted, profit from continuing operations attributable to ordinary equity holders of the parent

     34.25       44.67       0.64  


 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

Historically, personnel expenses directly associated with revenue recognized were disclosed within cost of revenue and personnel expenses associated with all other activities were disclosed within selling, general, and administrative expenses. Starting full year 2019 reporting we present all personnel expenses as a single item in a Personnel expenses line. Personnel expenses for the quarter ended June 30, 2019 were separated from cost of revenue and selling, general and administrative expenses and presented in a separate line for comparative purposes.


QIWI plc.

Consolidated Statement of Comprehensive Income

(in millions, except per share data)

 

     Six months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD(1)  

Revenue:

     17,794       19,955       285.3  

Payment processing fees

     14,490       15,731       224.9  

Interest revenue calculated using the effective interest rate

     1,397       1,433       20.5  

Fees from inactive accounts and unclaimed payments

     916       991       14.2  

Other revenue

     991       1,800       25.7  

Operating costs and expenses:

     (12,627     (13,785     (197.1

Cost of revenue (exclusive of items shown separetely below)

     (7,475     (7,946     (113.6

Selling, general and administrative expenses

     (1,699     (1,522     (21.8

Personnel expenses(2)

     (2,814     (3,620     (51.8

Depreciation and amortization

     (669     (612     (8.7

Credit loss (expense)/recovery

     30       (19     (0.3

Impairment of non-current assets

     —         (66     (0.9

Profit from operations

     5,167       6,170       88.2  
  

 

 

   

 

 

   

 

 

 

Share of gain/(loss) of an associate and a joint venture

     (71     239       3.4  

Other income and expenses, net

     55       (23     (0.3

Foreign exchange gain

     773       471       6.7  

Foreign exchange loss

     (989     (726     (10.4

Interest income and expenses, net

     (11     (61     (0.9
  

 

 

   

 

 

   

 

 

 

Profit before tax from continuing operations

     4,924       6,070       86.8  

Income tax expense

     (1,000     (1,232     (17.6
  

 

 

   

 

 

   

 

 

 

Net profit from continuing operations

     3,924       4,838       69.2  
  

 

 

   

 

 

   

 

 

 

Discontinued operations

      

Loss from discontinued operations

     (913     (1,402     (20.0
  

 

 

   

 

 

   

 

 

 

Net profit

     3,011       3,436       49.1  
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     2,987       3,403       48.6  

Non-controlling interests

     24       33       0.5  

Other comprehensive income

      

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

      

Foreign currency translation:

      

Exchange differences on translation of foreign operations

     (227     153       2.2  

Debt securities at fair value through other comprehensive income (FVOCI):

      

Net gains arising during the period, net of tax

     —         32       0.5  

Net gains recycled to profit or loss upon disposal

     —         (47     (0.7

Total other comprehensive income/(loss), net of tax

     (227     138       2.0  
  

 

 

   

 

 

   

 

 

 

Total comprehensive income, net of tax

     2,784       3,574       51.1  
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the parent

     2,766       3,530       50.5  

Non-controlling interests

     18       44       0.6  

Earnings per share:

      

Basic, profit attributable to ordinary equity holders of the parent

     48.49       54.78       0.78  

Diluted, profit attributable to ordinary equity holders of the parent

     48.02       54.58       0.78  

Earnings per share for continuing operations

      

Basic, profit from continuing operations attributable to ordinary equity holders of the parent

     63.31       77.33       1.11  

Diluted, profit from continuing operations attributable to ordinary equity holders of the parent

     62.70       77.04       1.10  


 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

Historically, personnel expenses directly associated with revenue recognized were disclosed within cost of revenue and personnel expenses associated with all other activities were disclosed within selling, general, and administrative expenses. Starting full year 2019 reporting we present all personnel expenses as a single item in a Personnel expenses line. Personnel expenses for the six months ended June 30, 2019 were separated from cost of revenue and selling, general and administrative expenses and presented in a separate line for comparative purposes.


QIWI plc.

Consolidated Statement of Cash Flows

(in millions)

 

     Six months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD(1)  

Operating activities

      

Profit before tax from continuing operations

     4,924       6,070       87  

Loss before tax from discontinued operations

     (1,138     (1,471     (21

Profit before tax

     3,786       4,599       66  
  

 

 

   

 

 

   

 

 

 

Adjustments to reconcile profit before tax to net cash flows:

      

Depreciation and amortization

     690       650       9  

Foreign exchange loss, net

     216       255       4  

Interest income, net

     (1,289     (1,595     (23

Credit loss expense

     281       810       12  

Share of (gain) / loss of an associate and a joint venture

     71       (239     (3

Loss on forward contract to sell Sovest loans’ portfolio

     —         658       9  

Share-based payments

     256       48       1  

Impairment of non-current assets

     —         134       2  

Loss from initial recognition

     91       13       0  

Other

     (10     (28     (0

Working capital adjustments:

      

(Increase)/decrease in trade and other receivables

     (281     1,218       17  

Increase in other assets

     (35     (37     (1

Increase / (decrease) in customer accounts and amounts due to banks

     66       (12,441     (178

Decrease in accounts payable and accruals

     (3,179     (3,391     (48

Decrease in loans issued from banking operations

     220       807       12  
  

 

 

   

 

 

   

 

 

 

Cash received from/(used in) operations

     883       (8,539     (122
  

 

 

   

 

 

   

 

 

 

Interest received

     1,741       1,985       28  

Interest paid

     (144     (332     (5

Income tax paid

     (748     (805     (12
  

 

 

   

 

 

   

 

 

 

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

     1,732       (7,691     (110
  

 

 

   

 

 

   

 

 

 

Investing activities

      

Cash paid for acquisitions

     (200     (66     (1

Purchase of property and equipment

     (291     (90     (1

Purchase of intangible assets

     (116     (111     (2

Proceeds from sale of fixed and intangible assets

     134       54       1  

Loans issued

     (345     (11     (0

Repayment of loans issued

     26       —         —    

Purchase of debt securities and deposits

     (2,468     (2,358     (34

Proceeds from sale and redemption of debt instruments

     1,412       3,230       46  
  

 

 

   

 

 

   

 

 

 

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

     (1,848     648       9  
  

 

 

   

 

 

   

 

 

 

Financing activities

      

Proceeds from borrowings

     —         (102     (1

Payment of principal portion of lease liabilities

     (142     (46     (1

Dividends paid to owners of the Group

     (1,122     (1,630     (23

Dividends paid to non-controlling shareholders

     (39     (54     (1
  

 

 

   

 

 

   

 

 

 

Net cash flow used in financing activities

     (1,303     (1,832     (26
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (945     403       6  

Net decrease in cash and cash equivalents

     (2,364     (8,472     (121
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the beginning of the period

     40,966       42,101       602  
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     38,602       33,629       481  
  

 

 

   

 

 

   

 

 

 

 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.


QIWI plc.

Reporting Segments Data

(in millions)

 

     Three months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD (1)  

Total Net Revenue

     5,563       6,839       97.8  
  

 

 

   

 

 

   

 

 

 

Payment Services

     5,158       5,397       77.2  

Consumer Financial Services

     283       437       6.2  

Rocketbank

     (132     509       7.3  

Corporate and Other

     254       496       7.1  
  

 

 

   

 

 

   

 

 

 

Total Segment Net Profit(2)

     1,965       2,756       39.4  
  

 

 

   

 

 

   

 

 

 

Payment Services

     3,206       3,243       46.4  

Consumer Financial Services

     (435     (134     (1.9

Rocketbank

     (511     44       0.6  

Corporate and Other

     (295     (397     (5.7
  

 

 

   

 

 

   

 

 

 

 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

For the three months ended June 30, 2019 and June 30, 2020 Total Adjusted Net Profit is equal to Total Segment Net Profit.

QIWI plc.

Reporting Segments Data

(in millions)

 

     Six months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD (1)  

Total Net Revenue

     10,930       13,099       187.3  
  

 

 

   

 

 

   

 

 

 

Payment Services

     9,994       10,718       153.2  

Consumer Financial Services

     501       1,003       14.3  

Rocketbank

     (295     532       7.6  

Corporate and Other

     730       846       12.1  
  

 

 

   

 

 

   

 

 

 

Total Segment Net Profit(2)

     3,618       4,510       64.5  
  

 

 

   

 

 

   

 

 

 

Payment Services

     6,194       6,294       90.0  

Consumer Financial Services

     (967     (656     (9.4

Rocketbank

     (1,001     (616     (8.8

Corporate and Other

     (608     (512     (7.3
  

 

 

   

 

 

   

 

 

 

 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

For the six months ended June 30, 2019 and June 30, 2020 Total Adjusted Net Profit is equal to Total Segment Net Profit.


Non-IFRS Financial Measures and Supplemental Financial Information

This release presents PS Payment Adjusted Net Revenue, PS 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 PS Payment Adjusted Net Revenue and PS 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 PS Payment Adjusted Net Revenue, PS Other Adjusted Net Revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Profit, and Adjusted Net Profit per share, including a quantitative reconciliation of Total Net Revenue, PS Payment Adjusted Net Revenue, PS 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 Net Revenue, PS Payment Adjusted Net Revenue and PS 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.

PS 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, betting, 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, card-to-card transfers and certain wallet-to-wallet transfers. 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. PS Other Adjusted Net Revenue primarily consists of revenue from fees for inactive accounts and unclaimed payments, interest revenue, revenue from overdrafts provided to agents, rent of space for 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, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD(1)  

Revenue (2)

     9,566       10,580       151.3  

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

     4,003       3,741       53.5  
  

 

 

   

 

 

   

 

 

 

Total Net Revenue

     5,563       6,839       97.8  
  

 

 

   

 

 

   

 

 

 

Segment Net Revenue

      

Payment Services Segment Revenue

     8,569       8,828       126.2  

PS Payment Revenue(4)

     7,543       7,796       111  

Minus: Cost of PS Payment Revenue (exclusive of depreciation and amortization)(5)

     3,131       3,187       46  
  

 

 

   

 

 

   

 

 

 

PS Payment Adjusted Net Revenue

     4,412       4,609       65.9  
  

 

 

   

 

 

   

 

 

 

PS Other Revenue(6)

     1,026       1,032       15  

Minus: Cost of PS Other Revenue (exclusive of depreciation and amortization)(7)

     280       244       3  
  

 

 

   

 

 

   

 

 

 

PS Other Adjusted Net Revenue

     746       788       11.3  
  

 

 

   

 

 

   

 

 

 

Payment Services Segment Net Revenue

     5,158       5,397       77.2  
  

 

 

   

 

 

   

 

 

 

Consumer Financial Services Segment Revenue

     328       486       7.0  

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

     46       49       0.7  
  

 

 

   

 

 

   

 

 

 

Consumer Financial Services Segment Net Revenue

     283       437       6.2  
  

 

 

   

 

 

   

 

 

 

Rocketbank Revenue

     338       688       9.8  

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

     470       178       2.6  
  

 

 

   

 

 

   

 

 

 

Rocketbank Net Revenue

     (132     509       7.3  
  

 

 

   

 

 

   

 

 

 

Corporate and Other Category Revenue

     331       578       8.3  

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

     77       83       1.2  
  

 

 

   

 

 

   

 

 

 

Corporate and Other Category Net Revenue

     254       496       7.1  
  

 

 

   

 

 

   

 

 

 

Total Net Revenue

     5,563       6,839       97.8  
  

 

 

   

 

 

   

 

 

 

Net Profit

     1,684       1,837       26.3  
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     344       331       4.7  

Other income and expenses, net

     (6     7       0.1  

Foreign exchange gain

     (132     (798     (11.4

Foreign exchange loss

     190       1,090       15.6  

Share of loss/(gain) of an associate and a joint venture

     (8     (107     (1.5

Interest income and expenses, net

     (4     33       0.5  

Income tax expenses

     414       751       10.7  

Expenses related to form F-3 filing

     —         —         —    

Loss on forward contract to sell Sovest loans’ portfolio

     —         658       9.4  

Share-based payments

     157       (11     (0.2

Impairment of non-current assets

     —         114       1.6  
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     2,639       3,905       55.8  
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     47.4     57.1     57.1

Net profit

     1,684       1,837       26.3  

Fair value adjustments recorded on business combinations and their amortization(8)

     95       85       1.2  

Expenses related to form F-3 filing

     —         —         —    

Share-based payments

     157       (11     (0.2

Foreign exchange (gain)/loss from revaluation of cash proceeds received from secondary public offering (9)

     44       —         —    

Impairment of non-current assets

     —         114       1.6  

Loss on forward contract to sell Sovest loans’ portfolio

     —         658       9.4  

Effect from taxation of the above items

     (15     73       1.0  
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit

     1,965       2,756       39.4  
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     31.89       44.35       0.63  

Diluted

     31.58       44.19       0.63  

Weighted-average number of shares used in computing Adjusted Net Profit per share

      

Basic

     61,623       62,147       62,147  

Diluted

     62,224       62,362       62,362  


 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

Including revenue from discontinued operations in the amount of RUB 332 million for the second quarter ended June 30, 2019 and RUB 466 million for the second quarter ended June 30, 2020.

(3)

Including cost of revenue from discontinued operations of RUB 55 million for the second quarter ended June 30, 2019 and RUB 62 million for the second quarter ended June 30, 2020

(4)

PS Payment Revenue represents payment processing fees, which primarily consists of the merchant and consumer fees charged for the payment transactions.

(5)

Cost of PS 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.

(6)

PS Other Revenue primarily consists of revenue from fees for inactive accounts and unclaimed payments, interest revenue, revenue from overdrafts provided to agents, rent of space for kiosks, cash and settlement services and advertising.

(7)

Cost of PS 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 PS Other Revenue and costs of call-centers and advertising commissions.

(8)

Amortization of fair value adjustments primarily includes the effect of the acquisition of control in Contact and Rapida.

(9)

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 includes 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)

 

     Six months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD(1)  

Revenue (2)

     18,504       21,190       302.9  

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

     7,575       8,092       115.7  
  

 

 

   

 

 

   

 

 

 

Total Net Revenue

     10,930       13,099       187.3  
  

 

 

   

 

 

   

 

 

 

Segment Net Revenue

      

Payment Services Segment Revenue

     16,438       17,816       254.7  

PS Payment Revenue(4)

     14,490       15,731       225  

Minus: Cost of PS Payment Revenue (exclusive of depreciation and amortization)(5)

     5,903       6,528       93  
  

 

 

   

 

 

   

 

 

 

PS Payment Adjusted Net Revenue

     8,587       9,203       131.6  
  

 

 

   

 

 

   

 

 

 

PS Other Revenue(6)

     1,948       2,085       30  

Minus: Cost of PS Other Revenue (exclusive of depreciation and amortization)(7)

     540       570       8  
  

 

 

   

 

 

   

 

 

 

PS Other Adjusted Net Revenue

     1,407       1,514       21.6  
  

 

 

   

 

 

   

 

 

 

Payment Services Segment Net Revenue

     9,994       10,718       153.2  
  

 

 

   

 

 

   

 

 

 

Consumer Financial Services Segment Revenue

     587       1,126       16.1  

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

     85       124       1.8  
  

 

 

   

 

 

   

 

 

 

Consumer Financial Services Segment Net Revenue

     501       1,003       14.3  
  

 

 

   

 

 

   

 

 

 

Rocketbank Revenue

     613       1,125       16.1  

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

     908       593       8.5  
  

 

 

   

 

 

   

 

 

 

Rocketbank Net Revenue

     (295     532       7.6  
  

 

 

   

 

 

   

 

 

 

Corporate and Other Category Revenue

     866       1,123       16.1  

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

     136       277       4.0  
  

 

 

   

 

 

   

 

 

 

Corporate and Other Category Net Revenue

     730       846       12.1  
  

 

 

   

 

 

   

 

 

 

Total Net Revenue

     10,930       13,099       187.3  
  

 

 

   

 

 

   

 

 

 

Net Profit

     3,011       3,436       49.1  
  

 

 

   

 

 

   

 

 

 

Plus:

      

Depreciation and amortization

     690       650       9.3  

Other income and expenses, net

     (55     23       0.3  

Foreign exchange gain

     (773     (471     (6.7

Foreign exchange loss

     989       726       10.4  

Share of loss/(gain) of an associate and a joint venture

     71       (239     (3.4

Interest income and expenses, net

     11       65       0.9  

Income tax expenses

     775       1,163       16.6  

Expenses related to form F-3 filing

     —         10       0.1  

Loss on forward contract to sell Sovest loans’ portfolio

     —         658       9.4  

Share-based payments

     256       48       0.7  

Impairment of non-current assets

     —         134       1.9  
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     4,975       6,203       88.7  
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     45.5     47.4     47.4

Net profit

     3,011       3,436       49.1  

Fair value adjustments recorded on business combinations and their amortization(8)

     197       169       2.4  

Expenses related to form F-3 filing

     —         10       0.1  

Share-based payments

     256       48       0.7  

Foreign exchange (gain)/loss from revaluation of cash proceeds received from secondary public offering (9)

     185       —         —    

Impairment of non-current assets

     —         134       1.9  

Loss on forward contract to sell Sovest loans’ portfolio

       658       9.4  

Effect from taxation of the above items

     (31     55       0.8  
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit

     3,618       4,510       64.5  
  

 

 

   

 

 

   

 

 

 

Adjusted Net Profit per share:

      

Basic

     58.74       72.58       1.04  

Diluted

     58.17       72.31       1.03  

Weighted-average number of shares used in computing Adjusted Net Profit per share

      

Basic

     61,601       62,137       62,137  

Diluted

     62,200       62,367       62,367  


 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

Including revenue from discontinued operations in the amount of RUB 710 million for six months ended June 30, 2019 and RUB 1,235 million for six months ended June 30, 2020.

(3)

Including cost of revenue from discontinued operations of RUB 99 million for six months ended June 30, 2019 and RUB 145 million for six months ended June 30, 2020

(4)

PS Payment Revenue represents payment processing fees, which primarily consists of the merchant and consumer fees charged for the payment transactions.

(5)

Cost of PS 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.

(6)

PS Other Revenue primarily consists of revenue from fees for inactive accounts and unclaimed payments, interest revenue, revenue from overdrafts provided to agents, rent of space for kiosks, cash and settlement services and advertising.

(7)

Cost of PS 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 PS Other Revenue and costs of call-centers and advertising commissions.

(8)

Amortization of fair value adjustments primarily includes the effect of the acquisition of control in Contact and Rapida.

(9)

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 includes the foreign exchange loss/(gain) on the US dollar amount, which we received at SPO.


QIWI plc.

Other Operating Data

 

     Three months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD (1)  

Payment Services Segment key operating metrics

      
  

 

 

   

 

 

   

 

 

 

Payment volume (billion)(2)

     370.8       346.8       5.0  
  

 

 

   

 

 

   

 

 

 

E-commerce

     100.2       100.2       1.4  

Financial services

     86.6       53.7       0.8  

Money remittances

     132.8       142.2       2.0  

Telecom

     41.8       42.6       0.6  

Other

     9.4       8.1       0.1  
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(3)

     4,411.8       4,608.4       65.9  
  

 

 

   

 

 

   

 

 

 

E-commerce

     2,520.1       2,687.7       38.4  

Financial services

     272.8       313.6       4.5  

Money remittances

     1,392.4       1,317.5       18.8  

Telecom

     176.0       238.7       3.4  

Other

     50.5       51.0       0.7  
  

 

 

   

 

 

   

 

 

 

Payment Average Adjusted Net Revenue Yield(4)

     1.19     1.33     1.33
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.51     2.68     2.68

Financial services

     0.31     0.58     0.58

Money remittances

     1.05     0.93     0.93

Telecom

     0.42     0.56     0.56

Other

     0.54     0.63     0.63
  

 

 

   

 

 

   

 

 

 

Payment Services Segment Net Revenue Yield

     1.39     1.56     1.56

Active kiosks and terminals (units)(5)

     136,134       118,455       118,455  

Active Qiwi Wallet accounts (million)(6)

     21.8       20.9       20.9  
  

 

 

   

 

 

   

 

 

 

Consumer Financial Services Segment key operating metrics

      
  

 

 

   

 

 

   

 

 

 

Payment volume (million)(7)

     5.8       5.1       0.1  

CFS Segment Net Revenue Yield

     4.88     8.57     8.57
  

 

 

   

 

 

   

 

 

 

 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

Payment Services Segment payment volume by market verticals and consolidated payment volume consist of the amounts paid by our customers to merchants or other customers 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.

(3)

PS Payment Adjusted Net Revenue is calculated as the difference between PS Payment Revenue and PS Cost of Payment Revenue (excluding D&A). PS Payment Revenue primarily consists of merchant and consumer fees. Cost of PS Payment Revenue primarily consists of commission to agents.

(4)

Payment Average Adjusted Net Revenue Yield is defined as PS Payment Adjusted Net Revenue divided by Payment Services payment segment volume.

(5)

We measure the numbers of our kiosks and terminals on a daily basis, with only those kiosks and terminals being taken into calculation through which at least one payment has been processed during the day, which we refer to as active kiosks and terminals. The period end numbers of our kiosks and terminals are calculated as an average of the number of active kiosks and terminals for the last 30 days of the respective reporting period.

(6)

Active 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 prior to the reporting date.

(7)

Consumer Financial Services segment payment volume consists of the transaction amounts paid by SOVEST card customers to merchants offline and online (including, but not limited to the partner-merchants) or withdrawn through ATMs less the amount returned for corresponding reimbursements.


QIWI plc.

Other Operating Data

 

     Six months ended (unaudited)  
     June 30, 2019     June 30, 2020     June 30, 2020  
     RUB     RUB     USD (1)  

Payment Services Segment key operating metrics

      
  

 

 

   

 

 

   

 

 

 

Payment volume (billion)(2)

     696.8       717.1       10.3  
  

 

 

   

 

 

   

 

 

 

E-commerce

     193.0       209.4       3.0  

Financial services

     155.4       121.3       1.7  

Money remittances

     249.1       286.5       4.1  

Telecom

     80.2       82.7       1.2  

Other

     19.2       17.3       0.2  
  

 

 

   

 

 

   

 

 

 

Payment adjusted net revenue (million)(3)

     8,586.3       9,203.1       131.6  
  

 

 

   

 

 

   

 

 

 

E-commerce

     4,992.5       5,400.5       77.2  

Financial services

     542.8       600.1       8.6  

Money remittances

     2,611.3       2,668.5       38.1  

Telecom

     334.5       430.1       6.1  

Other

     105.2       103.9       1.5  
  

 

 

   

 

 

   

 

 

 

Payment Average Adjusted Net Revenue Yield(4)

     1.23     1.28     1.28
  

 

 

   

 

 

   

 

 

 

E-commerce

     2.59     2.58     2.58

Financial services

     0.35     0.49     0.49

Money remittances

     1.05     0.93     0.93

Telecom

     0.42     0.52     0.52

Other

     0.55     0.60     0.60
  

 

 

   

 

 

   

 

 

 

Payment Services Segment Net Revenue Yield

     1.43     1.49     1.49

Active kiosks and terminals (units)(5)

     136,134       118,455       118,455  

Active Qiwi Wallet accounts (million)(6)

     21.8       20.9       20.9  
  

 

 

   

 

 

   

 

 

 

Consumer Financial Services Segment key operating metrics

      
  

 

 

   

 

 

   

 

 

 

Payment volume (billion)(7)

     10.8       13.9       0.2  

CFS Segment Net Revenue Yield

     4.63     7.23     7.23
  

 

 

   

 

 

   

 

 

 

 

(1)

Calculated using a ruble to U.S. dollar exchange rate of RUB 69.9513 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30, 2020.

(2)

Payment Services Segment payment volume by market verticals and consolidated payment volume consist of the amounts paid by our customers to merchants or other customers 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.

(3)

PS Payment Adjusted Net Revenue is calculated as the difference between PS Payment Revenue and PS Cost of Payment Revenue (excluding D&A). PS Payment Revenue primarily consists of merchant and consumer fees. Cost of PS Payment Revenue primarily consists of commission to agents.

(4)

Payment Average Adjusted Net Revenue Yield is defined as PS Payment Adjusted Net Revenue divided by Payment Services payment segment volume.

(5)

We measure the numbers of our kiosks and terminals on a daily basis, with only those kiosks and terminals being taken into calculation through which at least one payment has been processed during the day, which we refer to as active kiosks and terminals. The period end numbers of our kiosks and terminals are calculated as an average of the number of active kiosks and terminals for the last 30 days of the respective reporting period.

(6)

Active 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 prior to the reporting date.

(7)

Consumer Financial Services segment payment volume consists of the transaction amounts paid by SOVEST card customers to merchants offline and online (including, but not limited to the partner-merchants) or withdrawn through ATMs less the amount returned for corresponding reimbursements.

EX-99.2
Table of Contents

Exhibit 99.2

INDEX TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

QIWI plc

Interim condensed consolidated financial statements

(unaudited)

 

Report of independent registered public accounting firm

     F-2  

Interim condensed consolidated financial statements

  

Interim condensed consolidated statement of financial position as of December 31, 2019 and June 30, 2020

     F-3  

Interim condensed consolidated statement of comprehensive income for the six months ended June 30, 2019 and 2020

     F-4  

Interim condensed consolidated statement of cash flows for the six months ended June 30, 2019 and 2020

     F-5  

Interim condensed consolidated statement of changes in equity, for the six months ended June 30, 2019 and 2020

     F-6  

Notes to interim condensed consolidated financial statements

     F-8  

 

F-1


Table of Contents

Report of independent registered public accounting firm

To the Shareholders and Board of Directors of Qiwi plc

Results of Review of Interim Financial Statements

We have reviewed the accompanying interim condensed consolidated statement of financial position of Qiwi plc and subsidiaries (“the Group”) as of June 30, 2020, the related interim condensed consolidated statements of comprehensive income for the six and three-month periods ended June 30, 2020 and 2019 and interim condensed consolidated statements of cash flows and changes in equity for the six -month periods ended June 30, 2020 and 2019, and the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the interim financial statements for them to be in conformity with International Financial Reporting Standards (IFRS).

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Group as of December 31, 2019, the related consolidated statements of comprehensive income, consolidated statements of cash flows and changes in equity for the year then ended, and the related notes (not presented herein); and in our report dated March 24, 2020, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position of the Group as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Group’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLC

Moscow, Russia

August 19, 2020

 

F-2


Table of Contents

QIWI plc

Interim condensed consolidated statement of financial position

June 30, 2020

(in millions of rubles)

 

     Notes      As of
December 31, 2019
(audited)
     As of
June 30, 2020
(unaudited)
 

Assets

        

Non-current assets

        

Property and equipment

        2,346        2,238  

Goodwill and other intangible assets

     4        11,316        11,010  

Investments in associates

     13        1,118        1,357  

Long-term debt securities and deposits

     22        4,015        3,246  

Long-term loans

     6, 22        265        268  

Other non-current assets

        83        111  

Deferred tax assets

        217        225  
     

 

 

    

 

 

 

Total non-current assets

        19,360        18,455  
     

 

 

    

 

 

 

Current assets

        

Trade and other receivables

     7        6,162        4,853  

Short-term loans

     6        11,419        3,360  

Short-term debt securities and deposits

     22        1,136        1,059  

Prepaid income tax

        259        93  

Other current assets

     9        917        928  

Cash and cash equivalents

     8        42,101        33,629  

Assets held for sale

     4        123        6,596  
     

 

 

    

 

 

 

Total current assets

        62,117        50,518  
     

 

 

    

 

 

 

Total assets

        81,477        68,973  
     

 

 

    

 

 

 

Equity and liabilities

        

Equity attributable to equity holders of the parent

        

Share capital

        1        1  

Additional paid-in capital

        1,876        1,876  

Share premium

        12,068        12,068  

Other reserves

        2,576        2,600  

Retained earnings

        10,557        12,305  

Translation reserve

        289        431  
     

 

 

    

 

 

 

Total equity attributable to equity holders of the parent

        27,367        29,281  

Non-controlling interests

        70        60  
     

 

 

    

 

 

 

Total equity

        27,437        29,341  
     

 

 

    

 

 

 

Non-current liabilities

        

Long-term debt

     12        1,545        1,451  

Long-term lease liabilities

     14        1,017        1,105  

Long-term customer accounts

     11        444        320  

Other non-current liabilities

        45        40  

Deferred tax liabilities

        749        922  
     

 

 

    

 

 

 

Total non-current liabilities

        3,800        3,838  
     

 

 

    

 

 

 

Current liabilities

        

Trade and other payables

     10        27,295        24,283  

Customer accounts and amounts due to banks

     11        21,519        9,556  

Short-term lease liabilities

     14        340        385  

VAT and other taxes payable

        184        131  

Other current liabilities

     9        902        522  

Liabilities directly associated with the assets held for sale

     4        —          917  
     

 

 

    

 

 

 

Total current liabilities

        50,240        35,794  
     

 

 

    

 

 

 

Total equity and liabilities

        81,477        68,973  
     

 

 

    

 

 

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

F-3


Table of Contents

QIWI plc

Interim condensed consolidated statement of comprehensive income

June 30, 2020

(in millions of rubles)

 

            Unaudited  
            Three months
ended
    Six months
ended
    Three months
ended
    Six months
ended
 
     Notes      June 30, 2019 (restated)*     June 30, 2020  

Revenue:

        9,234       17,794       10,114       19,955  
     

 

 

   

 

 

   

 

 

   

 

 

 

Payment processing fees

        7,543       14,490       7,796       15,731  

Interest revenue calculated using the effective interest rate

     15        805       1,397       707       1,433  

Fees from inactive accounts and unclaimed payments

        471       916       501       991  

Other revenue

     15        415       991       1,110       1,800  
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        (6,524     (12,627     (6,376     (13,785
     

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue (exclusive of items shown separately below)

     16        (3,948     (7,475     (3,679     (7,946

Selling, general and administrative expenses

     17        (897     (1,699     (629     (1,522

Personnel expenses

        (1,359     (2,814     (1,709     (3,620

Depreciation and amortization

        (333     (669     (312     (612

Credit loss (expense)/recovery

     6, 7, 8, 20        13       30       (1     (19

Impairment of non-current assets

        —         —         (46     (66
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

        2,710       5,167       3,738       6,170  
     

 

 

   

 

 

   

 

 

   

 

 

 

Share of gain/(loss) of an associate and a joint venture

        8       (71     107       239  

Other income and expenses, net

        6       55       (7     (23

Foreign exchange gain

        132       773       798       471  

Foreign exchange loss

        (190     (989     (1,090     (726

Interest income and expenses, net

        4       (11     (31     (61
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit before tax from continuing operations

        2,670       4,924       3,515       6,070  

Income tax expense

     19        (527     (1,000     (708     (1,232
     

 

 

   

 

 

   

 

 

   

 

 

 

Net profit from continuing operations

        2,143       3,924       2,807       4,838  
     

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations

           

Loss from discontinued operations

     4        (459     (913     (970     (1,402
     

 

 

   

 

 

   

 

 

   

 

 

 

Net profit

        1,684       3,011       1,837       3,436  
     

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

           

Equity holders of the parent

        1,672       2,987       1,816       3,403  

Non-controlling interests

        12       24       21       33  

Other comprehensive income

           

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

           

Foreign currency translation:

           

Exchange differences on translation of foreign operations

 

     (46     (227     (33     153  

Debt securities at fair value through other comprehensive income (FVOCI):

           

Net gains arising during the period, net of tax

        —         —         40       32  

Net gains recycled to profit or loss upon disposal

        —         —         (25     (47

Total other comprehensive income/(loss), net of tax

        (46     (227     (18     138  
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income, net of tax

        1,638       2,784       1,819       3,574  
     

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

           

Equity holders of the parent

        1,627       2,766       1,798       3,530  

Non-controlling interests

        11       18       21       44  

Earnings per share:

           

Basic, profit attributable to ordinary equity holders of the parent

 

     27.13       48.49       29.24       54.78  

Diluted, profit attributable to ordinary equity holders of the parent

 

     26.87       48.02       29.13       54.58  

Earnings per share for continuing operations

           

Basic, profit from continuing operations attributable to ordinary equity holders of the parent

 

     34.58       63.31       44.83       77.33  

Diluted, profit from continuing operations attributable to ordinary equity holders of the parent

 

     34.25       62.70       44.67       77.04  

 

*

Amounts do not correspond with the previously presented ones due to discontinued operations (please refer to Note 4)

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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Table of Contents

QIWI plc

Interim condensed consolidated statement of cash flows

June 30, 2020

(in millions of rubles)

 

            Six months ended (unaudited)  
     Notes      June 30, 2019     June 30, 2020  

Operating activities

       

Profit before tax from continuing operations

        4,924       6,070  

Loss before tax from discontinued operations

     4        (1,138     (1,471
     

 

 

   

 

 

 

Profit before tax

        3,786       4,599  

Adjustments to reconcile profit before tax to net cash flows:

       

Depreciation and amortization

        690       650  

Foreign exchange loss, net

        216       255  

Interest income, net

     15        (1,289     (1,595

Credit loss expense

     4, 6, 7, 8, 20        281       810  

Share of (gain) / loss of an associate and a joint venture

        71       (239

Loss on forward contract to sell Sovest loans’ portfolio

     4        —         658  

Impairment of non-current assets

        —         134  

Share-based payments

        256       48  

Loss from initial recognition

     17        91       13  

Other

        (10     (28

Working capital adjustments:

       

(Increase)/decrease in trade and other receivables

        (281     1,218  

Increase in other assets

        (35     (37

Increase/(decrease) in customer accounts and amounts due to banks

        66       (12,441

Decrease in accounts payable and accruals

        (3,179     (3,391

Decrease in loans issued from banking operations

        220       807  
     

 

 

   

 

 

 

Cash received from/(used in) operations

        883       (8,539

Interest received

        1,741       1,985  

Interest paid

        (144     (332

Income tax paid

        (748     (805
     

 

 

   

 

 

 

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

        1,732       (7,691
     

 

 

   

 

 

 

Investing activities

       

Cash paid for acquisitions

        (200     (66

Purchase of property and equipment

        (291     (90

Purchase of intangible assets

        (116     (111

Proceeds from sale of fixed and intangible assets

        134       54  

Loans issued

        (345     (11

Repayment of loans issued

        26       —    

Purchase of debt securities and deposits

        (2,468     (2,358

Proceeds from sale and redemption of debt instruments

        1,412       3,230  
     

 

 

   

 

 

 

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

        (1,848     648  
     

 

 

   

 

 

 

Financing activities

       

Proceeds from borrowings

        —         (102

Payment of principal portion of lease liabilities

        (142     (46

Dividends paid to owners of the Group

     18        (1,122     (1,630

Dividends paid to non-controlling shareholders

        (39     (54
     

 

 

   

 

 

 

Net cash flow used in financing activities

        (1,303     (1,832

Effect of exchange rate changes on cash and cash equivalents

        (945     403  
     

 

 

   

 

 

 

Net decrease in cash and cash equivalents

        (2,364     (8,472

Cash and cash equivalents at the beginning of the period

     8        40,966       42,101  
     

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     8        38,602       33,629  
     

 

 

   

 

 

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

F-5


Table of Contents

QIWI plc

Interim condensed consolidated statement of changes in equity

June 30, 2020

(in millions of rubles, except per share data)

 

    Notes     Attributable to equity holders of the parent     Non-controlling
interests
    Total
equity
 
  Share capital     Additional
paid-in
capital
    Share
premium
    Other
reserves
    Retained
earnings
    Translation
reserve
    Total  
  Number of
shares
issued and
outstanding
    Amount  

Balance as of December 31, 2019 (audited)

      62,092,835       1       1,876       12,068       2,576       10,557       289       27,367       70       27,437  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period

      —         —         —         —         —         3,403       —         3,403       33       3,436  

Other comprehensive income:

                     

Foreign currency translation

      —         —         —         —         —         —         142       142       11       153  

Debt instruments at FVOCI

      —         —         —         —         (15     —         —         (15     —         (15
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

      —         —         —         —         (15     3,403       142       3,530       44       3,574  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Share-based payments

    23.4       —         —         —         —         48       —         —         48       —         48  

Exercise of options

      79,938       —         —         —         —         —         —         —         —         —    

Dividends (27 RUR per share)

    18       —         —         —         —         —         (1,655       (1,655       (1,655

Dividends to non-controlling interests

      —         —         —         —         —         —         —         —         (54     (54

Other

      —         —         —         —         (9     —         —         (9     —         (9
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2020 (unaudited)

      62,172,773       1       1,876       12,068       2,600       12,305       431       29,281       60       29,341  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

F-6


Table of Contents

QIWI plc

Interim condensed consolidated statement of changes in equity  (continued)

 

    Notes     Attributable to equity holders of the parent     Non-controlling
interests
    Total
equity
 
  Share capital     Additional
paid-in
capital
    Share
premium
    Other
reserves
    Retained
earnings
    Translation
reserve
    Total  
  Number of
shares
issued and
outstanding
    Amount  

Balance as of December 31, 2018 (audited)

      61,451,513       1       1,876       12,068       2,097       9,091       513       25,646       60       25,706  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period

      —         —         —         —         —         2,987       —         2,987       24       3,011  

Foreign currency translation

      —         —         —         —         —         —         (221     (221     (6     (227
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

      —         —         —         —         —         2,987       (221     2,766       18       2,784  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Share-based payments

    23.4       —         —         —         —         256       —         —         256       —         256  

Exercise of options

      186,066       —         —         —         —         —         —         —         —         —    

Dividends (18 RUR per share)

      —         —         —         —         —         (1,125     —         (1,125     —         (1,125

Dividends to non-controlling interests

      —         —         —         —         —         —         —         —         (39     (39
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2019 (unaudited)

      61,637,579       1       1,876       12,068       2,353       10,953       292       27,543       39       27,582  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

F-7


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements

 

1.

Corporate Information and description of business

The interim condensed consolidated financial statements of QIWI plc (hereinafter “the Company”) and its subsidiaries (collectively “the Group”) for the six months ended June 30, 2020 were authorized for issue on August 13, 2020.

The Company was registered on February 26, 2007 as a limited liability Company OE Investments in Cyprus under the Cyprus Companies Law, Cap. 113. The registered office of the Company is Kennedy 12, Kennedy Business Centre, 2nd Floor, P.C.1087, Nicosia, Cyprus. On September 13, 2010 the directors of the Company resolved to change the name of the Company from OE Investments Limited to QIWI Limited and later to QIWI plc.

Sergey Solonin is the ultimate controlling shareholder of the Group as of June 30, 2020.

Information on the Company’s principal subsidiaries is disclosed in Note 3.

 

2.

Basis of preparation and changes to the Group’s accounting policies

2.1. Basis of preparation

The interim condensed consolidated financial statements for the six months ended June 30, 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The condensed consolidated financial statements are presented in Russian rubles (“RUB”) and all values are rounded to the nearest million (RUB (000,000)) except when otherwise indicated.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual financial statements as of December 31, 2019.

2.2. New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2019, except for the adoption of new standards effective as of January 1, 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The following amended standards and interpretations became effective for the Group from January 1, 2020, but did not have any material impact on the Group:

 

   

Amendments to References to the Conceptual Framework in IFRS Standards (issued on March 29, 2018).

 

   

Amendments to IAS 1 and IAS 8: Definition of Material (issued on October 31, 2018).

 

   

Amendment to IFRS 3 Business Combinations (issued on October 22, 2018).

 

   

Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (issued in September, 2019).

 

F-8


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

2.

Basis of preparation and changes to the Group’s accounting policies (continued)

 

2.3. Changes in presentation

In 2019 the Group changed the presentation of its personnel and related costs by segregating it from cost of revenue and selling, general and administrative expenses in a separate line on the face of the financial statements. The reclassification was made to better reflect the nature and amount of these costs in the current business environment and in order to make the financial statements more comparable with industry peers.

 

     As
originally
presented
    Reclassification     As
reclassified
 
  Continued
operations
    Discontinued
operations
 

For the six months ended June 30, 2019

        

Personnel expenses

     —         (2,814     (707     (3,521

Cost of revenue

     (9,207     1,347       286       (7,574

Selling, general and administrative expenses

     (4,297     1,467       421       (2,409

For the three months ended June 30, 2019

        

Personnel expenses

     —         (1,359     (341     (1,700

Cost of revenue

     (4,753     606       144       (4,003

Selling, general and administrative expenses

     (2,180     753       197       (1,230
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-9


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

2.

Basis of preparation and changes to the Group’s accounting policies (continued)

 

2.4 Significant accounting judgments, estimates and assumptions

Significant accounting judgments, estimates and assumptions adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2019, except for the following:

The outbreak of coronavirus and associated responses from various countries around the world in 2020 have negatively affected consumer demand across the globe and across industries, and there is the potential for coronavirus and the responses to it to cause a global recession. One immediate effect of the coronavirus outbreak was a substantial plunge in the price of crude oil due to extended factory shutdowns and a fall in air travel and road transportation. As a result, the Russian ruble has significantly and abruptly depreciated against the U.S. dollar and euro. The full scope of the negative impact that coronavirus, corresponding lockdowns, the abrupt decline in oil prices and resulting exchange rate drop may have on the Russian economy remains unclear but has the potential to be very significant. As a result of the challenging operating environment in Russia, the Group has experienced slower payment volume growth. Further adverse changes in economic conditions in Russia could adversely impact the Group’s future revenues and profits and cause a material adverse effect on its business, financial condition and results of operations.

Fair value of loans issued

The Group changed the estimate in relation to market rate used in measurement of fair value of its installment card loans issued that also used as the effective interest rate in calculating interest revenue. In prior periods such rate was assumed to be equal to prevailing consumer loans rate. Starting January 1, 2020, reliable data for an emerging market of similar installment loan products In Russia became available to a wide range of market participants. This change in estimate is applied prospectively starting January 1, 2020, and resulted in no recognition of loss from initial recognition for the six months ended June 30, 2020. If there were no changes in the estimate, the Group would have recognized the loss from initial recognition in the amount of 35 for the six months ended June 30, 2020. All transactions related to installment card loans for the purposes of these financial statements are presented as discontinued operations (Note 4).

 

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Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

3.

Group structure

The interim condensed consolidated IFRS financial statements include the assets, liabilities and financial results of the Company and its subsidiaries. The subsidiaries are listed below:

 

          Ownership interest  

Subsidiary

  

Main activity

   As of
December 31,
2019
    As of
June 30,
2020
 

JSC QIWI (Russia)

   Operation of electronic payment kiosks      100     100

QIWI Bank JSC (Russia)

   Maintenance of electronic payment systems, money transfer, consumer and SME financial services      100     100

QIWI Payments Services Provider Ltd (UAE)

   Operation of on-line payments      100     100

QIWI International Payment System LLC (USA)

   Operation of electronic payment kiosks      100     100

Qiwi Kazakhstan LP (Kazakhstan)

   Operation of electronic payment kiosks      100     100

JLLC OSMP BEL (Belarus)

   Operation of electronic payment kiosks      51     51

QIWI-M S.R.L. (Moldova)

   Operation of electronic payment kiosks      51     51

QIWI ROMANIA SRL (Romania)

   Operation of electronic payment kiosks      100     100

QIWI Management Services FZ-LLC (UAE)

   Management services      100     100

Attenium LLC (Russia)

   Management services      100     100

Postomatnye Tekhnologii LLC (Russia)

   Logistic      100     100

Future Pay LLC (Russia)

   Operation of on-line payments      100     100

Qiwi Blockchain Technologies LLC (Russia)

   Software development      100     100

QIWI Shtrikh LLC (Russia)1

   On-line cashbox production      51     —    

QIWI Platform LLC (Russia)

   Software development      100     100

Factoring PLUS LLC (ex. QIWI Processing LLC (Russia)

   Software development      100     51

ContactPay Solution (United Kingdom)

   Operation of on-line payments      100     100

Rocket Universe LLC (Russia)

   Software development      100     100

Billing Online Solutions LLC (Russia)

   Software development      100     100

Flocktory Ltd (Cyprus)

   Holding company      99     99

Flocktory Spain S.L. (Spain)

   SaaS platform for customer lifecycle management and personalization      99     99

FreeAtLast LLC (Russia)

   SaaS platform for customer lifecycle management and personalization      99     99

SETTE FZ-LLC (UAE)

   Payment Services Provider      100     100

LALIRA DMCC (UAE)

   Payment Services Provider      100     100

QIWI Finance LLC (Russia) 2

   Financing management      —         100

Associate

       

JSC Tochka (Russia)

   Digital services for banks      40     40

 

1

The entity was liquidated during 2020.

2

The entity was established during 2020

 

F-11


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

4.

Acquisitions, disposals and business combinations

Rocketbank wind down

In March 2020, the Board of Directors has decided to wind down the Rocketbank project and the Group is currently investigating the most efficient ways to reuse or dispose of the Rocketbank assets. The Rocketbank’s operations are not considered as discontinued until the liquidation is completed.

SOVEST disposal

In the second quarter of 2020 the Group made a decision to dispose its SOVEST project.

In June 2020, the Group entered into the framework Agreement and several related binding agreements to sell certain specific SOVEST project assets to an unrelated party. As a part of the transaction, the Group should assign the portfolio of SOVEST instalment card loans as well as transfer respective brands and domains. At 30 June 2020, SOVEST was classified as a disposal group held for sale and as a discontinued operation.

The framework Agreement to sell SOVEST loan portfolio became non-cancellable forward contract starting from June 18, 2020. The Group recognized liability under the forward contract as of 30 June 2020 at its estimated fair value of 658, which approximated the difference between carrying amount of the instalment card loans and cash consideration to be received as part of the transaction. The forward contract liability was presented in liabilities directly associated with assets held for sale in the consolidated statement of financial position. Fair value measurement disclosures are provided in Note 22.

The Group also recognized loss on fair valuation of the forward contract liability in amount of 658 in net loss from discontinued operations in the consolidated statement of comprehensive income.

As a part of the transaction, the Group was to dismiss most SOVEST employees and the buyer intends to extend job offers to certain SOVEST employees and obliges to reimburse to the Group corresponding redundancy costs, if any. The Group recognized related reimbursement asset and accrued personnel expenses in assets held for sale and in the liabilities directly associated with the assets held for sale in the consolidated statement of financial position.

The sale of SOVEST assets was completed in July 2020 for approximately RUB 6 billion, resulting in a pre-tax loss on disposal of approximately RUB 0,7 billion.

SOVEST project represents the entire Group’s Consumer Financial Services operating segment.

 

F-12


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

4.

Acquisitions, disposals and business combinations (continued)

 

The results of the SOVEST project for the reporting periods are presented below:

 

     Three
months
ended
    Six months
ended
    Three
months
ended
    Six months
ended
 
     June 30, 2019     June 30, 2020  

Revenue:

     332       710       466       1,235  

Interest revenue calculated using the effective interest rate

     109       313       161       495  

Other revenue

     223       397       305       740  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

     (904     (1,848     (733     (2,044
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue (exclusive of items shown separately below)

     (55     (99     (62     (145

Selling, general and administrative expenses

     (333     (710     (66     (401

Personnel expenses

     (341     (707     (229     (601

Depreciation and amortization

     (11     (21     (19     (38

Credit loss expense

     (164     (311     (289     (791

Impairment of non-current assets

     —         —         (68     (68
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (572     (1,138     (267     (809
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss on forward contract to sell Sovest loans’ portfolio

     —         —         (658     (658

Interest income and expenses, net

     —         —         (2     (4
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before tax from discontinued operations

     (572     (1,138     (927     (1,471

Income tax benefit/(expense)

     113       225       (43     69  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss from discontinued operations

     (459     (913     (970     (1,402
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share for discontinued operations

        

Basic, loss from discontinued operations attributable to ordinary equity holders of the parent

     (7.45     (14.82     (15.59     (22.55

Diluted, loss from discontinued operations attributable to ordinary equity holders of the parent

     (7.38     (14.68     (15.54     (22.46

Impairment of non-current assets

Immediately before the classification of SOVEST as discontinued operations, the recoverable amount was estimated for certain items of Intangible assets and impairment loss was identified and recognised in June 2020 in the amount of 68 to reduce the carrying amount of the assets in the disposal group to their fair values less cost to sell. This impairment of non-current assets was recognised in discontinued operations in the statement of profit or loss.

 

F-13


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

4.

Acquisitions, disposals and business combinations (continued)

 

The major classes of assets and liabilities of the SOVEST project classified as held for sale as at June 30, 2020 are, as follows:

 

     Amount  

Assets

  

Loans issued

     6,396  

Reimbursement asset

     200  
  

 

 

 

Assets held for sale

     6,596  

Liabilities

  

Forward contract to sell Sovest loans’ portfolio

     658  

Accrued personnel expenses

     183  

Provision for undrawn credit commitments (Note 20)

     76  
  

 

 

 

Liabilities directly associated with assets held for sale

     917  
  

 

 

 

Net assets directly associated with disposal group

     5,679  
  

 

 

 

The net cash flows incurred by the SOVEST project are, as follows:

 

     Six months
ended June 30,
2019
     Six months
ended June 30,
2020
 

Operating

     (997      822  

Investing

     (12      (7

Financing

     —          (14
  

 

 

    

 

 

 

Net cash (outflow)/inflow

     (1,009      801  
  

 

 

    

 

 

 

 

F-14


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

5.

Operating segments

The Chief executive officer (CEO) and executive board of the Group is considered as the chief operating decision maker of the Group (CODM). In reviewing the operational performance of the Group and allocating resources, the CODM reviews selected items of each segment’s statement of comprehensive income.

In determining that the CODM was the CEO, the Group considered the CEO responsibilities as well as the following factors:

 

 

The CEO determines compensation of other executive officers while the Group’s board of directors approves corporate key performance indicators (KPIs) and total bonus pool for those executive officers. In case of underperformance of corporate KPIs a right to make a final decision on bonus pool distribution is left with the Board of directors (BOD);

 

 

The CEO is actively involved in the operations of the Group and regularly chairs meetings on key projects of the Group; and

 

 

The CEO regularly reviews the financial and operational reports of the Group. These reports primarily include segment net revenue, segment profit before tax and segment net profit for the Group as well as certain operational data.

The financial data is presented on a combined basis for all key subsidiaries and associates representing the segment net revenue, segment profit before tax and segment net profit. The Group measures the performance of its operating segments by monitoring: segment net revenue, segment profit before tax and segment net profit. Segment net revenue is a measure of profitability defined as the segment revenues less segment direct costs. The Group does not monitor balances of assets and liabilities by segments as the CODM considers they have no impact on decision-making.

The Group has identified its operating segments based on the types of products and services the Group offers. The CODM reviews segment net revenue, segment profit before tax and segment net profit separately for each of the following reportable segments: Payment Services, Consumer Financial Services and Rocketbank:

 

 

Payment Services (PS), operating segment that generates revenue through operations of the payment processing system offered to the Group’s customers through a diverse range of channels and interfaces;

 

 

Consumer Financial Services (CFS), operating segment that generates revenue through financial services rendered to individuals, currently presented by SOVEST installment card project;

 

 

Rocketbank (RB), operating segment that generates revenue through offering digital banking service including debit cards and deposits to retail customers.

For the purpose of management reporting, expenses related to corporate back-office operations were not allocated to any operating segment and are presented separately to the CODM. Results of other operating segments and corporate expenses are included in Corporate and Other (CO) category for the purpose of segment reporting.

 

F-15


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

5.

Operating segments (continued)

 

Management reporting is different from IFRS, because it does not include certain IFRS adjustments, which are not analyzed by the CODM in assessing the operating performance of the business. The adjustments affect such major areas as share-based payments, expenses associated with filing the registration statement on Form F-3 for our major shareholders and related transaction expenses, foreign exchange gain/(loss) from revaluation of cash proceeds received from secondary public offering, the effect of disposal of subsidiaries and fair value adjustments, such as amortization and impairment, as well as non-recurring items that occur from time to time and are evaluated for adjustment as and when they occur. The tax effect of these adjustments is also excluded from management reporting.

The segments’ statement of comprehensive income for the six months ended June 30, 2020, as presented to the CODM are presented below:

 

     Six months ended June 30, 2020  
     PS      CFS     RB     CO     Total  

Revenue

     17,816        1,126       1,125       1,123       21,190  

Segment net revenue

     10,718        1,003       532       846       13,099  

Segment profit/(loss) before tax

     7,525        (825     (717     (365     5,618  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Segment net profit/(loss)

     6,294        (656     (616     (512     4,510  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

The segments’ statement of comprehensive income for the three months ended June 30, 2020, as presented to the CODM are presented below:

 

     Three months ended June 30, 2020  
     PS      CFS     RB      CO     Total  

Revenue

     8,828        486       688        578       10,580  

Segment net revenue

     5,397        437       509        496       6,839  

Segment profit/(loss) before tax

     3,801        (166     86        (287     3,434  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Segment net profit/(loss)

     3,243        (134     44        (397     2,756  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

The segments’ statement of comprehensive income for the six months ended June 30, 2019, as presented to the CODM are presented below:

 

     Six months ended June 30, 2019  
     PS      CFS     RB     CO     Total  

Revenue

     16,438        587       613       866       18,504  

Segment net revenue

     9,994        501       (295     730       10,930  

Segment profit/(loss) before tax

     7,420        (1,214     (1,245     (537     4,424  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Segment net profit/(loss)

     6,194        (967     (1,001     (608     3,618  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

The segments’ statement of comprehensive income for the three months ended June 30, 2019, as presented to the CODM are presented below:

 

     Three months ended June 30, 2019  
     PS      CFS     RB     CO     Total  

Revenue

     8,569        328       338       331       9,566  

Segment net revenue

     5,158        283       (132     254       5,563  

Segment profit/(loss) before tax

     3,840        (547     (641     (258     2,394  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Segment net profit/(loss)

     3,206        (435     (511     (295     1,965  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

F-16


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

5.

Operating segments (continued)

 

Segment net revenue, as presented to the CODM, for the three and six months ended June 30, 2020 and 2019 is calculated by subtracting cost of revenue from revenue as presented in the table below:

 

     Three months
ended June 30,
2019
    Six months
ended June 30,
2019
    Three months
ended June 30,
2020
    Six months
ended June 30,
2020
 

Revenue from continuing operations under IFRS

     9,234       17,794       10,114       19,955  

Revenue from discontinuing operations under IFRS (Note 4)

     332       710       466       1,235  

Cost of revenue from continuing operations

     (3,948     (7,475     (3,679     (7,946

Cost of revenue from discontinuing operations (Note 4)

     (55     (99     (62     (145
  

 

 

   

 

 

   

 

 

   

 

 

 

Total segments net revenue, as presented to CODM

     5,563       10,930       6,839       13,099  
  

 

 

   

 

 

   

 

 

   

 

 

 

A reconciliation of segment profit before tax as presented to the CODM to IFRS consolidated profit before tax of the Group, for the three and six months ended June 30, 2020 and 2019, is presented below:

 

     Three months
ended June 30,
2019
    Six months
ended June 30,
2019
    Three months
ended June 30,
2020
    Six months
ended June 30,
2020
 

Consolidated profit before tax from continuing operations under IFRS

     2,670       4,924       3,515       6,070  

Consolidated loss before tax from discontinuing operations under IFRS (Note 4)

     (572     (1,138     (927     (1,471
  

 

 

   

 

 

   

 

 

   

 

 

 

Fair value adjustments recorded on business combinations and their amortization

     95       197       85       169  

Impairment of non-current assets

     —         —         114       134  

Share-based payments

     157       256       (11     48  

Expenses related to form F-3 filing

     —         —         —         10  

Loss on forward contract to sell Sovest loans’ portfolio

     —         —         658       658  

Foreign exchange (gain)/loss from revaluation of cash proceeds received from secondary public offering

     44       185       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total segments profit before tax, as presented to CODM

     2,394       4,424       3,434       5,618  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-17


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

5.

Operating segments (continued)

 

A reconciliation of segment net profit as presented to the CODM to IFRS consolidated net profit of the Group, for the three and six months ended June 30, 2020 and 2019, is presented below:

 

     Three months
ended June 30,
2019
    Six months
ended June 30,
2019
    Three months
ended June 30,
2020
    Six months
ended June 30,
2020
 

Consolidated net profit from continuing operations under IFRS

     2,143       3,924       2,807       4,838  

Consolidated net loss from discontinuing operations under IFRS (Note 4)

     (459     (913     (970     (1,402
  

 

 

   

 

 

   

 

 

   

 

 

 

Fair value adjustments recorded on business combinations and their amortization

     95       197       85       169  

Impairment of non-current assets

     —         —         114       134  

Share-based payments

     157       256       (11     48  

Expenses related to form F-3 filing

     —         —         —         10  

Loss on forward contract to sell Sovest loans’ portfolio

     —         —         658       658  

Foreign exchange (gain)/loss from revaluation of cash proceeds received from secondary public offering

     44       185       —         —    

Effect from taxation of the above items

     (15     (31     73       55  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total segments net profit, as presented to CODM

     1,965       3,618       2,756       4,510  
  

 

 

   

 

 

   

 

 

   

 

 

 

Geographic information

Revenues from external customers are presented below:

 

     Three months
ended June 30,
2019
     Six months
ended June 30,
2019
     Three months
ended June 30,
2020
     Six months
ended June 30,
2020
 

Russia

     7,181        13,750        8,140        16,286  

Other CIS

     388        753        365        762  

EU

     868        1,716        710        1,384  

Other

     1,129        2,285        1,365        2,758  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue from continued and discontinued operations

     9,566        18,504        10,580        21,190  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue is recognized according to merchants’ or consumers’ geographic place. The majority of the Group’s non-current assets are located in Russia.

The Group has only one external customer the revenue from whom exceeded 10% of the Group’s total revenue and amounted to 11.1% for the six months ended June 30, 2020 (had no such customers for the six months ended June 30, 2019), and has no such customers for the three months ended June 30, 2020 (amounted to 10.04% for the three months ended June 30, 2019). This revenue was generated within the PS segment.

 

F-18


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

6.

Long-term and short-term loans issued

As of June 30, 2020, long-term and short-term loans issued consisted of the following:

 

     Total as of
    June 30, 2020    
     Expected credit
loss allowance
     Net as of
    June 30, 2020    
 

Long-term loans

        

Loans to legal entities

     268        —          268  
  

 

 

    

 

 

    

 

 

 

Total long-term loans

     268        —          268  
  

 

 

    

 

 

    

 

 

 

Short-term loans

        

Loans to legal entities

     3,401        (41      3,360  
  

 

 

    

 

 

    

 

 

 

Total short-term loans

     3,401        (41      3,360  
  

 

 

    

 

 

    

 

 

 

As of December 31, 2019, long-term and short-term loans consisted of the following:

 

     Total as of
December 31, 2019
     Expected credit
loss allowance
     Net as of
December 31, 2019
 

Long-term loans

        

Loans to legal entities

     265        —          265  
  

 

 

    

 

 

    

 

 

 

Total long-term loans

     265        —          265  
  

 

 

    

 

 

    

 

 

 

Short-term loans

        

Loans to legal entities

     3,467        (33      3,434  

Installment Card Loans

     8,795        (810      7,985  
  

 

 

    

 

 

    

 

 

 

Total short-term loans

     12,262        (843      11,419  
  

 

 

    

 

 

    

 

 

 

The amounts in the tables show the maximum exposure to credit risk regarding loans issued. The Group has no internal grading system of loans issued for credit risk rating grades analysis. Loans issued are not collateralized.

An analysis of the changes in the ECL allowances due to changes in corresponding gross carrying amounts for the six months ended June 30, 2020, was the following:

 

     Stage 1
Collective
     Stage 2
Collective
     Stage
3
     Total  

ECL allowance as of January 1, 2020

     (229      (120      (494      (843
  

 

 

    

 

 

    

 

 

    

 

 

 

Changes because of financial instruments (originated or acquired)/derecognized during the reporting period

     (123      (210      (488      (821

Transfers between stages

     140        (8      (132      —    

Reclassification to disposal group

     212        338        1,073        1,623  
  

 

 

    

 

 

    

 

 

    

 

 

 

ECL allowance as of June 30, 2020

     —          —          (41      (41
  

 

 

    

 

 

    

 

 

    

 

 

 

 

F-19


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

6.

Long-term and short-term loans issued (continued)

 

An analysis of the changes in the ECL allowances due to changes in corresponding gross carrying amounts for the three months ended June 30, 2020, was the following:

 

     Stage 1
Collective
     Stage 2
Collective
     Stage 3      Total  

ECL allowance as of April 1, 2020

     (286      (391      (704      (1,381

Changes because of financial instruments (originated or acquired)/derecognized during the reporting period

     65        44        (392      (283

Transfers between stages

     9        9        (18      —    

Reclassification to disposal group

     212        338        1,073        1,623  
  

 

 

    

 

 

    

 

 

    

 

 

 

ECL allowance as of June 30, 2020

     —          —          (41      (41
  

 

 

    

 

 

    

 

 

    

 

 

 

An analysis of the changes in the ECL allowances due to changes in corresponding gross carrying amounts for the six months ended June 30, 2019, was the following:

 

     Stage 1
Collective
     Stage 2
Collective
     Stage 3      Total  

ECL allowance as of January 1, 2019

     (216      (120      (517      (853

Changes because of financial instruments (originated or acquired)/derecognized during the reporting period

     (81      1        (213      (293

Transfers between stages

     127        (7      (120      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

ECL allowance as of June 30, 2019

     (170      (126      (850      (1,146
  

 

 

    

 

 

    

 

 

    

 

 

 

An analysis of the changes in the ECL allowances due to changes in corresponding gross carrying amounts for the three months ended June 30, 2019, was the following:

 

     Stage 1
Collective
     Stage 2
Collective
     Stage 3      Total  

ECL allowance as of April 1, 2019

     (203      (149      (622      (974

Changes because of financial instruments (originated or acquired)/derecognized during the reporting period

     26        21        (219      (172

Transfers between stages

     7        2        (9      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

ECL allowance as of June 30, 2019

     (170      (126      (850      (1,146
  

 

 

    

 

 

    

 

 

    

 

 

 

As of June 30, 2020, and December 31, 2019, the Group had no overdue but not impaired loans.

 

7.

Trade and other receivables

As of June 30, 2020, trade and other receivables consisted of the following:

 

     Total as of
    June 30,     
2020
     Expected credit loss
allowance/Provision
for impairment
     Net as of
     June 30,     
2020
 

Cash receivable from agents

     2,485        (156      2,329  

Deposits issued to merchants

     1,767        (16      1,751  

Commissions receivable

     136        (19      117  

Other receivables

     455        (70      385  
  

 

 

    

 

 

    

 

 

 

Total financial assets

     4,843        (261      4,582  
  

 

 

    

 

 

    

 

 

 

Advances issued

     274        (3      271  
  

 

 

    

 

 

    

 

 

 

Total trade and other receivables

     5,117        (264      4,853  
  

 

 

    

 

 

    

 

 

 

 

F-20


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

7.

Trade and other receivables (continued)

 

As of December 31, 2019, trade and other receivables consisted of the following:

 

     Total as of
December 31,
2019
     Expected credit loss
allowance/Provision

for impairment
     Net as of
December 31,
2019
 

Cash receivable from agents

     2,947        (199      2,748  

Deposits issued to merchants

     2,690        (12      2,678  

Commissions receivable

     158        (21      137  

Other receivables

     276        (56      220  
  

 

 

    

 

 

    

 

 

 

Total financial assets

     6,071        (288      5,783  
  

 

 

    

 

 

    

 

 

 

Advances issued

     380        (1      379  
  

 

 

    

 

 

    

 

 

 

Total trade and other receivables

     6,451        (289      6,162  
  

 

 

    

 

 

    

 

 

 

The amounts in the tables show the maximum exposure to credit risk regarding Trade and other receivables. The Group has no internal grading system of Trade and other receivables for credit risk rating grades analysis. Receivables are non-interest bearing, except for agent receivables bearing, generally, interest rate of 20%-36% per annum and credit terms generally do not exceed 30 days. There is no requirement for collateral for customer to receive an overdraft.

An analysis of the changes in the ECL allowances due to changes in the corresponding gross carrying amounts for the six months ended June 30, 2020 and June 30, 2019, was the following:

 

     2019      2020  

ECL allowance as of January 1,

     (366      (289
  

 

 

    

 

 

 

Changes because of financial instruments (originated or acquired)/

derecognized during the reporting period

     23        (18

Amounts written off

     72        43  
  

 

 

    

 

 

 

ECL allowance as of June 30,

     (271      (264
  

 

 

    

 

 

 

An analysis of the changes in the ECL allowances due to changes in the corresponding gross carrying amounts for the three months ended June 30, 2020 and June 30, 2019, was the following:

 

     2019      2020  

ECL allowance as of April 1,

     (303      (269
  

 

 

    

 

 

 

Changes because of financial instruments (originated or acquired)/

derecognized during the reporting period

     18        (10

Amounts written off

     14        15  
  

 

 

    

 

 

 

ECL allowance as of June 30,

     (271      (264
  

 

 

    

 

 

 

 

F-21


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

8.

Cash and cash equivalents

As of June 30, 2020, and December 31, 2019, cash and cash equivalents consisted of the following:

 

     As of
December 31, 2019
     As of
June 30, 2020
 

Correspondent accounts with Central Bank of Russia (CBR)

     3,261        925  

Cash with banks and on hand

     7,317        6,401  

Short-term CBR deposits

     30,500        8,780  

Other short-term bank deposits

     1,025        17,525  

Less: Allowance for ECL

     (2      (2
  

 

 

    

 

 

 

Total cash and cash equivalents

     42,101        33,629  
  

 

 

    

 

 

 

The Group held cash and cash equivalents in different currencies mainly in Russian rubles and U.S. dollars.

The amounts in the table show the maximum exposure to credit risk regarding cash and cash equivalents. The Group has no internal grading system of cash and cash equivalents for credit risk rating grades analysis.

Since 2017 the Company has a bank guarantee and secured it by a cash deposit of U.S.$ 2.5 mln until July 31, 2021.

 

9.

Other current assets and other current liabilities

9.1 Other current assets

As of June 30, 2020 and December 31, 2019, other current assets consisted of the following:

 

     As of
December 31, 2019
     As of
June 30, 2020
 

Reserves at CBR*

     611        580  

Total other financial assets

     611        580  
  

 

 

    

 

 

 

Prepaid expenses

     230        164  

Other

     76        184  
  

 

 

    

 

 

 

Total other current assets

     917        928  
  

 

 

    

 

 

 

 

*

Banks are currently required to post mandatory reserves with the CBR to be held in non-interest bearing accounts. Starting from July 1, 2019, such mandatory reserves established by the CBR constitute 4.75% for liabilities in RUR and 8% for liabilities in foreign currency. The amount is excluded from cash and cash equivalents for the purposes of cash flow statement and does not have a repayment date.

The Group has no internal grading system of other current assets for credit risk rating grades analysis.

 

F-22


Table of Contents

QIWI plc

Notes to interim condensed consolidated financial statements (continued)

 

9.2 Other current liabilities

As of June 30, 2020 and December 31, 2019, other current liabilities consisted of the following:

 

     As of
December 31, 2019
     As of
June 30, 2020
 

Contract liability related to loyalty programs

     607        61  

Contract liability related to guarantees issued

     199        365  

Other

     96        96  
  

 

 

    

 

 

 

Total other current liabilities

     902        522  
  

 

 

    

 

 

 

 

10.

Trade and other payables

As of June 30, 2020, and December 31, 2019, the Group’s trade and other payables consisted of the following:

 

     As of
December 31, 2019
     As of
June 30, 2020
 

Payables to merchants

     12,116        12,470  

Money remittances and e-wallets accounts payable

     6,515        6,791  

Deposits received from agents

     6,246        2,776  

Commissions payable

     503        379  

Accrued personnel expenses and related taxes

     883        1,182  

Provision for undrawn credit commitments (Note 20)

     98        —    

Other payables

     934        685