Mail.Ru Group Limited Final unaudited IFRS results for 1H 2011 and preliminary revenue update for Q3 2011
Trading Update Call Replay (mp3, 8.9 Mb)
Mail.Ru Group Limited (LSE: MAIL, hereinafter referred as "the Company" or "the Group"), one of the largest Internet companies in the high-growth Russian-speaking Internet market, today provides the following IFRS final unaudited financial results for the first half of the year ended June 30, 2011 and an update on the preliminary unaudited segment revenues for Q3 2011.
«We are very pleased to deliver robust growth in the core areas of our business.
In Q3 2011, Mail.Ru Group has achieved the group aggregate segment revenue of $124.9m, representing growth of 59.1% compared to Q3 2010 (which is 51.3% ex-currency). Online advertising and community IVAS remained the key monetization growth drivers. We also publish our final unaudited 1H 2011 IFRS results validating the figures released in our August 2011 trading statement. These results demonstrate ongoing efficiencies in headquarter, hosting and rental expenses, resulting in segment EBITDA margin expanding to 51.1% compared to 39.2% in 1H 2010.
Our core products are continuing to deliver solid audience growth. Driven by ongoing product improvements, Odnoklassniki has achieved impressive growth in both monthly and daily audience with its September 2011 average audience increasing by 18% and 27% respectively, compared to the same period last year (TNS Russia). Our flagship instant messaging product, Mail.ru Agent, has continued its expansion with the September monthly audience growing by 29% year-on-year.
We continue to execute on integration of social graphs across our communications and entertainment products. We have launched two important features in September – active cross-product navigation and interoperability between Mail.ru Agent and ICQ. The first feature aims to simplify navigation between My World, Odnoklassniki, e-mail, games, search, instant messaging and other services ensuring that visitors can conveniently use our products without having to leave the site or type a new address in their browser bar. It also allows users to see activity updates across the different products, for example, events on our social networks and e-mail messages received. The second feature allows users of Mail.ru Agent to add ICQ users and vice versa without creating an extra account and therefore improving communication between friend lists across the two instant messengers.
Mobile remains a key priority for us. We have made significant progress in improving the mobile experience with our products – including the introduction of new mobile versions of Odnoklassniki, search, email and instant messaging products. This is evidenced by growth of mobile users in our core communication products, which is faster than the growth of PC users as compared to prior periods.
Our focus on developing the right talent was marked by a significant event – the finals of the largest competition for Russian-speaking programmers, the 2011 Russian Code Cup powered by Mail.ru Group. More than 3,000 people participated in the qualifying stages, 50 of the most talented proceeded to the final stage and the overall winner was determined in September in Moscow. We had participants from 7 countries and are very pleased with our assistance to provide new development opportunities for young Russian-speaking engineers.
During Q4 the Group will undertake a GDR buying programme of up to $35m in order to cover a part of the employee and director options of the IPO incentive plan. These GDRs will be held by the Trust to be used over the lifetime of the options.
Given the continued strong execution in the business, and notwithstanding a slightly more challenging forecasting environment and a weaker RUB exchange rate, we are still confident to re-iterate our full year 2011 guidance of revenue growth around 50% with EBITDA margin percentage in the high forties.»
The Mail.Ru Group management team will host an analyst and investor conference call at 14.00 UK time (17.00 Moscow time, 9.00 U.S. Eastern Daylight Time), on Tuesday 25 October 2011, to discuss the final unaudited IFRS results for the first half ended June 30, 2011 and the preliminary revenue performance for Q3 2011 as well as certain forward-looking information. The conference call will include a Question and Answer session.
To participate in this conference call, please use the following access details:
Participant Toll Free Telephone Numbers:
810 800 500 9311
From the UK
0800 279 4841
From the US
1877 249 9037
This press release contains statements of expectation and other forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "forecast", "intend", "will", "could", "may" or "might", the negative of such terms or other similar expressions including "outlook" or "guidance". The forward-looking statements in this release are based upon various assumptions that are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and may be beyond the Group's control. Actual results could differ materially from those discussed in the forward looking statements herein. Many factors could cause actual results to differ materially from those discussed in the forward looking statements included herein, including competition in the marketplace, changes in consumer preferences, the degree of Internet penetration and online advertising in Russia, concerns about data security, claims of intellectual property infringement, adverse media speculation, changes in political, social, legal or economic conditions in Russia, exchange rate fluctuations, and the Group's success in identifying and responding to these and other risks involved in its business, including those referenced under "Risk Factors" in the Group's public filings. The forward-looking statements contained herein speak only as of the date they were made, and the Group does not intend to amend or update these statements except to the extent required by law to reflect events and circumstances occurring after the date hereof.
|USD in Millions||1H 2010||1H 2011|
|Group aggregate segment revenue (1)||137.2||228.2|
|Revenue growth, %||66.3%|
|Organic revenue growth (2), %||59.3%|
|Group aggregate segment EBITDA (3)||53.7||116.5|
|EBITDA margin, %||39.2%||51.1%|
|Group aggregate segment net profit (4-8)||39.7||85.9|
|Net profit margin, %||28.9%||37.6%|
* The numbers in this table and further in the document may not exactly foot or cross-foot due to rounding
|Revenue, USD Millions*||Q3 2010||Q3 2011||Growth, %|
* The operating segment data is presented based on principles used for presentation of operating segments results, i.e. excluding certain IFRS adjustments (for further details, see Note 4 to the Group’s Interim Condensed Consolidated Financial Statements for the six months ended June 30, 2011)
** Includes other IVAS
|Mail.ru portal, monthly unique users, TNS||25.2||27.8|
|Mail.ru portal, daily unique users, TNS||12.3||14.0|
|My World monthly unique users, TNS||18.1||19.3|
|My World daily unique users, TNS||4.9||4.9|
|Odnoklassniki monthly unique users, TNS||16.1||18.9|
|Odnoklassniki daily unique users, TNS||6.2||7.9|
|Email monthly unique users, TNS||21.4||22.7|
|Email daily unique users, TNS||9.7||10.4|
|Mail.ru Agent global monthly users||16.6||21.4|
|ICQ global monthly users||33.9||26.6|
|ICQ Russia monthly users||16.7||14.7|
|Thousands||H1 2010||H1 2011|
|Average monthly paying users||167||227|
|Average monthly paying users - Mail||604||625|
|Average monthly paying users - OK||1,000||2,349|
Note: All TNS data is Russia only. Mail.ru portal includes 34 projects. Mail.ru Agent, ICQ, MMO Games and Community IVAS is internal Company data. ICQ users include unaffiliated.
At September 30, 2011, the Group's net cash balance was $124.3m and the Group had no debt outstanding as of September 30, 2011.
The Group’s interim condensed consolidated financial statements for the half year ended June 30, 2011 prepared in accordance with IFRS and accompanied by an independent auditor’s review report have been filed on the National Storage Mechanism appointed by the Financial Services Authority and can be accessed at http://corp.mail.ru/files/Mail.Ru_Group_6m_2011.pdf
The Group aggregate segment financial information is derived from the financial information used by management to manage the Group's business by aggregating the segment financial data of the Mail.ru, OK and Headhunter segments and eliminating intra-segment and inter-segment revenues and expenses. Group aggregate segment financial information differs significantly from the financial information presented on the face of the Group's consolidated financial statements in accordance with IFRS. This information may also differ from the data presented in the operating segments notes to the consolidated financial statements of the Group as of and for the year ended December 31, 2010 and to the interim condensed consolidated financial statements of the Group as of and for the six months ended June 30, 2010. In particular: