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YoY to RUB 33bn and came in 8% above consensus and 9% above our forecast. We note the solid recovery in advertising revenues (+10% YoY to RUB 13bn), as well as the continuing expansion of the MMO Games business (+23% YoY to RUB 9.8bn) and Other revenues (more than doubled YoY to RUB 5.5bn) in 4Q20. EBITDA was down 25% YoY to RUB 7.3bn, and exceeded consensus by 2%, although it was 3% below our more upbeat forecast. We note that the company did not see the traditional margins increase at the end of this year, as it targeted investments in future growth, in line with its earlier guidance. As a result, the EBITDA margin slipped to 22% in 4Q20, from 38% in 4Q19. Net profit fell 55% YoY to RUB 1.8bn, 34-38% below consensus and us. We note that Mail.ru re-consolidated ESForce, its esports asset, which was previously reflected as an asset held for sale. This slightly increased revenues (by about RUB 0.4bn), but put extra pressure on the bottom line (a loss of RUB 0.4bn), with almost a neutral impact on EBITDA in 4Q20.
2021 guidance. Mail.ru targets a revenues increase of 18-21% YoY to RUB 127-130bn in 2021 (vs. the Bloomberg consensus as of 3 March of RUB 125bn). The company also expects its EBITDA margin to improve vs. 2020, when it stood at 25%. Overall, we think that this guidance is positive and see scope for upside surprises. They might come from, among other things, new M&A deals and the potential consolidation of assets in which Mail.ru currently holds minority stakes. Among other things, we highlight Mail.ru's plans to improve the profitability of its Games segment significantly, with 2021 EBITDA targeted at RUB 10bn (vs. RUB 6.3bn in 2020). Mail.ru expects its EdTech exposure to continue growing strongly, which is to be reported as a separate segment from 1Q21. In particular, EdTech revenues reached RUB 6.1bn in 2020 and the company expects this number to increase to RUB 8-9bn in 2021. Mail.ru also highlighted that this business was profitable in 2020. We note that EdTech assets are valued at relatively high multiples, which could be supportive for Mail.ru's re-rerating. Finally, Mail.ru plans to make its classifieds exposure Youla, which generated an EBITDA loss of RUB 2.2bn in 2020, breakeven in 2022, with some reduction of losses in 2021.
An investment fund controlled by Alexey Nechaev, the founder of The owners of Russian direct sales leader Faberlic, has acquired Sports.ru with affiliated blogging and marketing assets. The amount of the deal was not disclosed, reports East-West Digital News (EWDN). Sports.ru is a leading Russian-language sports media and community platform. Founded by a journalist in 1998, the platform was sold in 2006 to Herman Tkachenko, according to Forbes Russia, which reported on the deal with Faberlic. Before the acquisition by Nechaev’s fund, Tkachenko owned a 67.7% stake in the company, alongside other individual shareholders. Sports.ru currently generates nearly 50mn visits monthly, according to SimilarWeb (up from some 7mn visitors monthly in 2016). The goal of the acquirer is “to diversify its core
167 RUSSIA Country Report April 2021 www.intellinews.com