Mail.Ru Group Limited (LSE: MAIL, hereinafter referred as “the Company” or “the Group”), a leading Internet company in the high-growth Russian-speaking Internet market, today provides the following preliminary unaudited segment financial information and key operating highlights for the full year ended 31 December 2012.
FY 2012 Performance Highlights
- FY 2012 Group aggregate segment revenue grew 39% Y-o-Y to RUR 21,151 million
- FY 2012 Group aggregate segment EBITDA grew 38% Y-o-Y to RUR 11,534 million
- FY 2012 Group aggregate net profit grew 37% Y-o-Y to RUR 8,499 million
- Net cash position as of 31 December 2012 was RUR 28,777 million
- Monthly audience (TNS Russia) of Mail.Ru portal in December 2012 reached 33.3 million Russian users
Special dividend
- The company is also pleased to announce that it will pay a special dividend on Thursday 28th March 2013 of US$4.30 per share for shareholders on the record date of Wednesday 20th March 2013 representing a total payout of US$899m. The dividend was approved by the Board of Directors of Mail.ru on February 25th 2013.
Key Developments in 2012
Email & portal
- New version of Mail.Ru Main Page – modern, lightweight and significantly faster
- IMAP support for Email
- HTTPS support for Email and Main Page
- “Social” email list design with user profile pictures
- Email mobile applications for all major platforms (iOS, Android, Windows Phone, Windows 8 )
- Calendar.Mail.Ru – an extensive planning tool synchronized with mobile phones
- News.Mail.Ru and Sport.Mail.Ru mobile applications for all major platforms (iOS, Android, Windows Phone, Windows 8 )
Social networks
- Multichat allowing conversations with several friends at the same time in Odnoklassniki
- Significantly improved newsfeed allowing users seamlessly post multimedia attachments (links, multiple photos, user generated video and text)
- Odnoklassniki launched a tool for undertaking polls
- Users are able to customize personal profiles and groups with different skins
- A number of improvements to mobile versions and applications for major platforms (iOS, Android), including: music, video chat, photo filters, native messaging, credit card payments
Instant messaging
- Mail.Ru Agent and ICQ PC clients merged to the same technological platform
- Release of Mail.Ru Agent and ICQ applications for iOS and Android supporting voice calls
- ICQ 8.0 for Windows featuring new design, mobile and fixed line calls
- ICQ development moved to Moscow and both messengers are developed by the same team now
Online games
- Warface AAA shooter recorded 145,000 PCU in January 2013
- Worldwide launch of mobile Juggernaut
- ArcheAge AAA MMORPG license from XLGames
- Continued development of AAA title Skyforge
Search & E-Commerce
- Machine learning algorithms for search results ranking, improving relevance
- Launch of geo-location based search with search results more relevant for the user’s current location
- Launch of mobile applications for Money.Mail.Ru and Tovary.Mail.Ru (iOS and Android)
- Fully revamped design, improved services and usability of all e-commerce products
Target.Mail.Ru
- Introduced retargeting solution
- API for third party developers
Corporate
- The Company paid a special dividend of USD 795 million (USD 3.8 per GDR) on 28 August 2012
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Commenting on the results of the Group, Dmitry Grishin, Chairman and CEO of Mail.Ru Group, said:
“I am pleased to report FY 2012 Mail.Ru Group results. Despite a tougher underlying market in display in H2 we continued to execute strongly in all other segments of the business. Compared to FY 2011, Group aggregate segment revenue increased by 39%, reaching RUR 21,151 million and Group aggregate segment EBITDA rose 38% to RUR 11,534 million.
Community IVAS has become a key contributor to our revenues as well as a material driver of revenue growth, delivering 78.7% growth Y-o-Y in FY 2012. The main driver of this growth is the increase of paying users – especially in virtual gifts and services, as well as in our API platform. We expect that IVAS will continue to show strong growth in 2013 as we remain focused on increasing user engagement and improving our product.
While context advertising continued to grow in line with the market for the FY, we saw a slowdown of growth in display revenue in H2. This was driven by a combination of a planned reduction in advertising inventory on some of our properties, the ban on alcohol advertising and the inventory adjustments for TV. While these impacted H2 2012 we do not expect these effects to continue through 2013 and hence forecast a recovery in display growth rates through the year.
Throughout 2012 we continued to execute on our MMO games strategy. Warface has been an important component of this and has seen an increasing traction in terms of both user and revenue, and became a Top 3 revenue generating game by the end of the year. We have a full release pipeline into 2013 and will continue to internationalize our most successful titles. As a result we would expect the MMO games division to continue to deliver solid growth in 2013.
During the year, we continued to attract new talent, especially core engineering expertise. In the year our total headcount rose by 15% (394 full-time employees) and reached 3,059 as of the end of 2012. Into 2013 we will continue to focus on attracting talent with our focus remaining on core programming and engineering skills.
While we continue to invest in the business, our continued growth and the operating leverage in the business allow us to continue to deliver strong margins with FY 2012 EBITDA margins of 54.5%.
As a company we have always been clear that as we disposed of non-core assets we would not retain excess cash. Following the special dividend of $3.80, paid in August 2012, we are pleased to announce today that the Board has approved the payment of a further $4.30 per share special dividend to be paid on Thursday 28th March 2013 with a record date of Wednesday 20th March 2013.
Looking into 2013 the structural drivers of our business remain unchanged. We expect that community IVAS and MMO gaming will be our key revenue streams, and with the events which have impacted display growth in H2 2012 dropping off we look into 2013 with confidence. As a result we would expect to see FY 2013 Group aggregate segment revenue growth of between 25-28%.
We continue to put a strong focus on resources being directed to driving user engagement and product development. As a result, and even taking into account the increased costs associated with our new offices, the operating leverage in our business remains unchanged. We would therefore expect FY 2013 Group aggregate segment EBITDA margin percentage to be in the low fifties.”
