Mail.Ru Group 2Q 20 Conference Call Notes
Online advertising market has bottomed out in April with around 10-15% yoy decline, rebounded in May and flattened recovery in June. July suggests a flat to single digit growth possible in 3Q 20e.Mail.Ru Group views 2Q 20 result in the Games segment as unique and expects dynamics to normalize going forward with likely higher investments in 3Q 20e and improving profitability in 4Qe vs. 3Qe, and the FY 20e revenue growth and EBITDA margin are expected to be in line or slightly better than in FY 19.
IVAS revenue growth expected to revert to single digit numbers in 2H 20e.
FY 20e revenue forecast of above RUB 100 bn is based on an expected 4-6% yoy real GDP contraction in Russia, Mail.Ru Group sees a 20%+ growth as feasible in normalized circumstances.
Mail.Ru Group views the government initiative on IT companies tax breaks as beneficial, particularly for gaming and B2B segments.
Mail.Ru Group views the benefits of AliExpress Russia vs. the competition in local marketplace field in the large user base, strong ties with Mail.Ru Group ecosystem and Alibaba expertise.
Mail.Ru Group is an Internet company based in the Russian Federation. Co. operates the email service [email protected] and two IM networks in Russia - Mail.Ru Agent and ICQ. Co. operates two Russian-language online social networking sites: Moi [email protected] and Odnoklassniki.ru, and owns a strategic minority equity stake in the social network Vkontakte. Co. is also engaged in developing projects in E-commerce and operating more than 40 thematic vertical sites, targeting various user categories. Co. is also Russia's predominant online games company. Co. maintains a portfolio of online games which includes 34 MMO games and over 30 games for social networking sites.
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