QIWI plc
Q4 2017 Earnings Call Transcript

Published: 28 Mar 2018

[Operator:]

Good day, everyone, and welcome to QIWI Fourth Quarter and Full Year 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mrs. Varvara Kiseleva, Head of Investor Relations. Please go ahead.

[Varvara Kiseleva:]

Thank you, operator, and good morning, everyone. Welcome to the QIWI fourth quarter and full year earnings call. I am Varvara Kiseleva, Head of Investor Relations, and with me today are Sergey Solonin, our Chief Executive Officer; and Alexander Karavaev, our Chief Financial Officer. A replay of this call will be available until Wednesday, April 4, 2018. Access information for the replay is listed in today's earnings press release, which is available on our Investor Relations website at investor.qiwi.com. For those listening to the replay, this call was held and recorded on March 28, 2018. Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. The forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties. QIWI cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect the events that occur after this call. Please refer to the company's most recent annual report on Form 20-F filed with the Securities and Exchange Commission for factors that could cause our actual results to differ materially from any forward-looking statements. During this call, management will provide certain information that will constitute non-IFRS financial measures, such as adjusted net revenues, adjusted EBITDA, adjusted net profit and adjusted net profit per share. Reconciliations to IFRS measures and certain additional information are also included in today's earnings press release. With that, we will begin by turning the call over to Sergey Solonin, our Chief Executive Officer.

[Sergey Solonin:]

Thank you, Varvara, and good morning, everyone. Thanks for joining us today. We're glad to share our fourth quarter and full year results, demonstrating strong performance of our core Payment Services business. Our Payment Services segment demonstrated 19% segment net revenue and 34% segment net profit growth in 2017 driven by the development of our payment ecosystem as well as secular trends towards digitalization of payment in our focus market. This quarter, we continued to develop our key products in order to offer our clients convenient solutions in different market verticals, especially in Money Remittances and E-commerce. I would also like to note that the growth in Payment Services Segment net revenue accelerated in Q4, which gives us solid growth prospects into 2018. At the same time, during 2017, we have been investing heavily in our Consumer Financial Services segment namely our SOVEST project as well as the development of our Tochka project. Currently, we plan to continue further with our investments in SOVEST and other projects and partnerships. Given all of the above, we believe that our performances adds a solid foundation for our future growth. We achieved strong financial results in our Payment Service business this year and thus we’re able to continue investing in our new business lines and projects. We believe we will be able to grow our Payment Services segment by focusing on building a wider digital infrastructure and enriching our product offering, expanding and penetrating further our core markets and generate substantial operating cash flows. At the same time we see 2018 as a year of investments in our new projects and we continue to focus on executing our strategy and developing our new initiatives. In 2017, our Payment Services segment volume increased by 8% to reach RUB 911 billion, driven by significant growth in Money Remittance and E-commerce verticals, which grew 51% and 17% respectively over 2016. Growth in these verticals was partially offset by decline in Financial Services and Telecom verticals. We're especially pleased with dynamics in Money Remittance vertical, which was under substantial macroeconomic and competitive pressure in 2016. In the fourth quarter and throughout the year, we continued to see substantial growth in this vertical that was triggered by secular trends towards digitalization of payments as well as development of our peer-to-peer ecosystem. As of December 31st, we had RUB 20.1 million wallet accounts, an increase of RUB 2.9 million as compared to the prior year, resulting from our continuous effort to grow and leverage our infrastructure. For the first quarter of 2017, our Consumer Financial Services segment demonstrated positive net revenue for the first time since the launch of the project, which we’re pleased with. We are seeing positive dynamics across few key metrics of the project and continue to believe that we have entered an interesting niche with a significant potential. Total consumer Financial Services segment payment volume reached RUB 3.3 billion in 2017. As of December 31st, the amount of total loans issued under SOVEST project was RUB1.7 billion. Moreover, we have connected more than 40,000 retail locations in both offline and online, including some of the most well-known Russian retail chains and providers. We have also noted that competition continues to intensify in this market and seeing increasing interest towards installment card projects from other players in the banking segments. Positive volume dynamics in our key market verticals converted into strong Payment Services segment net revenue growth and overall robust performance in our core business. Alexander will walk you through the fourth quarter and full year numbers in more details, just in a moment, while I would like to walk you through some recent developments. Now I would like to provide some details on our recent transactions with Otkritie Bank. In August 2017, we have executed a series of transactions to acquire brands software and hardware of Tochka and Rocketbank from Otkritie Bank. We have also entered into a number of operational agreements with Otkritie in connection with these transactions. Currently we continue our negotiations with the new administration of Otkritie Bank, regarding our future cooperation development of both businesses. We believe that our negotiations in respect of Tochka currently in advance phase and we will be in position to frame a mutually beneficial resolution that would establish the basis for our future joint activities. Moreover, we have launched Tochka project on QIWI infrastructure and started offering Tochka services in Qiwi Bank in August 2017, as well as providing services to Tochka clients, who have their accounts in Otkritie Bank. Then the project is operating as a multi-bank service providing its customers with an opportunity to open accounts with either Qiwi Bank or Otkritie. As of December 31st, we had approximately RUB 1 billion of customer bonuses and serviced more than 14,000 Tochka clients in Qiwi Bank. We have also concluded the development of Rocketbank project. However, Rocketbank operations have not launched so far and we presume that given the early stages of our negotiations in respect of this project, we may not launch Rocketbank operations in the near future. As far as we are in the process of negotiations with Otkritie Bank, regarding the future structure and development of Tochka and Rocketbank project, we are not in a position to provide any estimates or potential mid-term contribution of these businesses. With this, I will turn the call over to Alexander, who will walk you through our financial results in more detail. Alexander?

[Alexander Karavaev:]

Thank you, Sergey, and good morning, everyone. First, I would like to walk you through the new segment presentation of our business. This quarter we revised our organizational structure to better reflect our operational and management strategy, as well as the expansion of our business operations, including the broadening of our products and services, distinguishing two key operating segments as well as Corporate and Other category. Payment Services segment, which includes our core Payment Services business, historically has been and continues to be a major part of our operations. It currently generates most of our revenues as well as significant free cash flows that we can invest in developing new businesses and projects. Consumer Financial Services segment is represented by our payment by installment card project services, while Corporate and Other Category includes expenses associated with the corporate operations of Qiwi Group, as well as fund for research and development initiative and revenues, costs and expenses associated with a number of individual and significant projects and emerging businesses that we are currently testing. Q4 total adjusted net revenue increased by 46% to reach RUB 4.1 billion, up from RUB 2.8 billion in the fourth quarter of 2016. The increase was mainly driven by Payment Services segment and Corporate and Other Category net revenue growth. Payment Services segment net revenue, which includes payment services -- payment adjusted net revenue and Payment Services other adjusted net revenue increased 24% to reach RUB 3.5 billion compared to RUB 2.8 billion in the fourth quarter of 2016. Payment Services -- Payment adjusted net revenue increased 26% to RUB 3 billion, up from RUB 2.4 billion in the prior year. As a result of the net revenue growth in our e-commerce and Money Remittance verticals, which grew 42% and 31% respectively. Offset by a continued decline in net revenue Telecom and Financial Services verticals by 15% and 8% respectively. Our financial results in this segment was driven both by increase in volumes as Sergey just described and the improvement of the payment average net revenue yield by 17 basis points year-over-year. Payment services and other adjusted net revenue increased 16% to RUB 495 million as compared to RUB 427 million in the prior year, mainly because of the increase in revenue from fees for inactive accounts and unclaimed payments due to the effect of change in the company's policy for recognitions of such revenue in the prior year. Payment Services segment net revenue excluding revenue from fees for inactive accounts and unclaimed payments increased 23% compared to the same period in prior year, primarily as a result of growth in payment services, payment adjusted net revenue as discussed earlier. Consumer Financial Services segment net revenue was RUB 35 million for the fourth quarter of 2017 as compared with the net revenue loss of RUB 3 million in the fourth quarter of the prior year, showing the development of our SOVEST project. Net revenue of the Corporate and Other Category was RUB 581 million for the fourth quarter of 2017, compared to RUB 8 million in the prior year. Such increase results mostly from the launch of the Tochka project and recognition of corresponding revenues from information and technology service agreement with Otkritie Bank for providing services to Tochka clients that have their account in Otkritie Bank in the amount of RUB 578 million for the period from August 2017 to December 2017 in the fourth quarter. Moving on to expense. This quarter we managed to closely monitor costs in our Payment Services segment, increasing the operating leverage and generating substantial cash flows. Strong operating performance for our Payment Services business supported our investments in the development of our new projects most notably SOVEST. This in turn adjusted EBITDA decreased 23% to RUB 965 million from RUB 1.3 billion in the prior year. Adjusted EBITDA margin was 23% compared to 45% in the prior year. Adjusted EBITDA margin contractions primarily resulted from the increase in client acquisitions and advertising expenses by RUB 266 million incurred due to investments in the development for our SOVEST project as well as personnel expenses incurred in connection with SOVEST and Tochka projects. Adjusted EBITDA was also affected by the increase in other administrative expenses by RUB 502 million as compared to the same period in the prior year, primarily due to expenses incurred in connection with the acquisition of assets of Tochka and Rocketbank from Otkritie. This was partially offset by lower bad debt expenses as compared to the same period of 2016. Group adjusted net project decreased 32% to RUB 642 million down from RUB 940 million in the prior. Adjustment net profit was largely affected by the same factors of adjusted EBITDA as well as recognition of the income tax expense as opposed to the income tax credit for the same period in the prior year. Payment Services segment net profit increased 47% to reach RUB 2 billion compared to RUB 1.4 billion in the prior year, driven by Payment Services segment net revenue growth as well as increasing operating leverage in the Payment Services business. Consumer Financial Services segment net loss was RUB 647 million in the fourth quarter 2017 as compared to a net loss of RUB 131 million in the same period of the prior year, resulting from the expansion of the operational SOVEST project and associated costs mostly related to the consumer acquisitions. Corporate and Other Category net loss was RUB 723 million, an increase of 145% compared with the net loss of RUB 295 million in the prior year. The net loss was primarily driven by expenses incurred in connection with the acquisition of assets of Rocketbank and Tochka from Otkritie Bank and launch of Tochka project. Finally as you saw in our earnings release, the Board of Directors decided to refrain from distributing the dividends, while we're incurring significant investments in connection with the launching of a lot of our new projects. We expect that throughout the next 12 months starting first quarter of 2017 we will concentrate on investing into our future growth. While long-term we remain committed to distributing all excess cash to our shareholders. Now on to our guidance. Given substantial uncertainly in respect of the future arrangements regarding the development of the Tochka and Rocketbank projects and the outcome of our negotiations in respect thereon with Otkritie, we believe that we are not in a position provide any reliable estimates of revenues or expenses associated with Tochka and Rocketbank projects for 2018, we therefore only include in our guidance for 2018 actual expenses associated with the Tochka and Rocketbank projects for the first quarter 2018. Actual results of these projects for 2018 may differ substantially from the data that we used in our guidance. Given that we expect group adjusted net revenue to increase by 12% to 16% over 2017. Payment Services segment net revenue increase by 12% to 16% over 2017. Group adjusted net profit to decrease by 10% to 0% over 2017, while Payment Services segment net profit is expected to increase by 10% to 15% over the prior year. Although we show 2017 results as a solid foundation for future growth, certain other segments remained beyond our control and hence will be authorized to revise guidance in the course of the year. With that, operator, please open up the call for questions.

[Operator:]

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions]. Our first question is from Vladimir Bespalov with VTB Capital. Please proceed.

[Vladimir Bespalov:]

Hello, congratulations on very strong numbers and thank you for taking my questions. First of all, I would like to ask you about SOVEST. So my impression is that you are moving a bit slower with this project that you initially anticipated when you launched it in 2016. And probably it looks like you are still financing it with your own cash, do you expect any acceleration of this project in 2018? And how are you going to finance it whether you'll need to borrow this year for this project. And also on this project what is the progress on making it a multi-banking product and what is the status of your talks with other banks from this issue? Thank you.

[Sergey Solonin:]

Thank you, Vladimir this is Sergey here. Yes, well SOVEST really is going a little bit lower than we expected mostly it is due to our revisiting the business model and trying to work with a lot of experiments that we did in 2017. So now we are much more sure about the business models and we understand how it works. More or less we did all the experiments so we're on track now. Last -- I think fourth quarter and first quarter are very good in terms of number of new customers. So we are back on track with some lagging of few quarters where we did some of the experiments and some of the channels that we use. Second, we really talk with -- we're still committed to multi-bank model. So we think that this is what we are generally doing this project for. And we're talking with two banks. So we think that at least two banks through the end of the year we will be in at least setting and contracting with some -- with first bank will already be partnering with us. So generally we think that this is still a very attractive model for us to go on. So we continue to contract a lot of merchants. We think that it is much more efficient to have one operator for many banks to do this work with the merchants, because it's a lot of documents, a lot of things that we do professionally on this side. So we think that this model should work with a lot of banks and with that we still think that this project will be financed from the bank side and we will not have a burden on financing the loans to consumer. That's it. Thank you.

[Vladimir Bespalov:]

Okay. And if you work with other banks just it will be a commission based business for you, right?

[Sergey Solonin:]

Yes, it will be commission based business. We will not create from our balance consumer loans.

[Vladimir Bespalov:]

Okay. And the second question is on Tochka, I would like to clarify one thing which you have in your statement, you mentioned that the revenues, which you showed in 2017 from Tochka, from those clients who decided to choose Otkritie Bank, to be serviced that. But there are some clients that are choosing Qiwi Bank as well as far as I understand. So where the revenue from those clients goes in your accounts and what is the amount of that revenue, if you could disclose?

[Alexander Karavaev:]

Hi, it's Alexander. So the revenue, yes, obviously we have already quite few clients that on-boarded the Qiwi Bank. But comparative to the even massive merger of [indiscernible] it's not as large, but generally that revenue go through the same line, but it's not as material. And we are not really disclosing that separately.

[Sergey Solonin:]

And also if you look at Tochka from our angle, we also aim to have a marketing distribution model. So the Otkritie and QIWI is just the technical, more technical case to have experiment and to test the technology that will allow client to choose a bank finally. And for us, we see it also finally a multi-bank model and commission based model.

[Vladimir Bespalov:]

Okay. And just the last clarification, net revenue mostly on non-cash right, before you set all the issues with Otkritie or you are getting like cash revenues from Otkritie at the moment?

[Sergey Solonin:]

For Otkritie it’s non-cash, yes.

[Vladimir Bespalov:]

Thank you very much.

[Sergey Solonin:]

Thank you.

[Operator:]

Our next question is from Ulyana Lenvalskaya with UBS. Please proceed.

[Ulyana Lenvalskaya:]

Good afternoon, this is Ulyana from UBS. Thanks for the call and congratulations on good numbers. The follow-up question on SOVEST please, is it possible for you to disclose a number of issued cards or the number of effective users either for 2017, 2018 or some sort of a target we can use in the model?

[Sergey Solonin:]

Hi, Ulyana. Unfortunately no, we do not discuss those numbers, I think we disclose only volumes right now. And the total loan amount that we issued, I think this year we can come to the numbers, if we agree to do it as in kind of association where everyone in this year will disclose their number. So then, we're trying to move there, we're trying to agree on that, so that this market in that sense will be transferable. So, if we agree then this year you will see those numbers as well.

[Ulyana Lenvalskaya:]

Okay. So maybe just the comment since you inspire that to show this as a separate segment, my view of the number of cards should be helpful and should also be reported. The clarification on the guidance please, so this 12% to 16% both for the total business and for the payments, is that basically implying 0% from SOVEST on a net basis in 2018?

[Sergey Solonin:]

Yes, it implies the revenue SOVEST as well.

[Alexander Karavaev:]

Not zero.

[Sergey Solonin:]

Not zero.

[Ulyana Lenvalskaya:]

No, no, like Alexander the total revenue growth guidance is 12% to 16% and then Payments segment growth guidance is also 12% to 16%. So basically the same, which means that the others…

[Alexander Karavaev:]

Yes, to your point Ulyana these are the following. So in 2017, we booked revenue that contract that we have with Otkritie on Tochka that is kind of still subject to final negotiations, but the livelihood is quite high that we eventually will get the demand for 2017. For 2018 we have not included that in guidance, because we are already in quite an advance phase negotiation with Otkritie and hit up that we may have in respect of Tochka can be somewhat different. So it may not for the revenues of that business might not be flowing directly through our P&L. So that’s why to be conservative, we have not included that. So in 2018 in our guidance we consider the revenue of Tochka zero, so that’s why you have exactly same percentage for core business and total.

[Ulyana Lenvalskaya:]

And the revenue of SOVEST is zero as well, right?

[Alexander Karavaev:]

No, no SOVEST is not zero.

[Ulyana Lenvalskaya:]

Fine. Another question if I may, there was quite nice addition of a number of active wallet accounts in the fourth quarter over 1 million users, and you said this is because of the expansion of consumer and merchant used cases. Can you maybe provide a few examples of those new used cases, which expense the user base?

[Sergey Solonin:]

Well, yes, we are working with merchants on for example different kind of events, so we did a big event with Alibaba Express. So, a lot of clients coming from the merchant side, also we did several new product that also brought some of our clients to our ecosystem. For example it was a project with Uber drivers, project with now Urban Lee and Qiwi bonus and also we have a lot of clients on the betting side the project, Distribute [ph]. So it’s kind of B2B, B2C components that is quite high in QIWI where we have the business through which we acquire the clients of this business on to the QIWI platform because we do financial services for this business. That was the large take of the clients in the fourth quarter.

[Ulyana Lenvalskaya:]

Thank you.

[Sergey Solonin:]

Thank you.

[Operator:]

[Operator instructions]. Our next question is from Alexandria Melnikova [ph] from Alpha Bank. Please proceed.

[Unidentified Analyst:]

Hi, good afternoon thanks a lot for the call. Can you please maybe guide us, when do you expect the SOVEST to be breakeven, is it like 2019 as you previously talked or given you have the better understanding of the situation now as you said?

[Sergey Solonin:]

Yes, it will depend on how advance we’re going to be in terms of multi-bank model and how all those experiments that we plan to start late in the year will grow. But generally if everything going to be more or less successful with multi-bank model we may expect the project to breakeven sometime in 2019.

[Unidentified Analyst:]

Thank you very much.

[Sergey Solonin:]

Yes, thank you.

[Unidentified Analyst:]

Thank you very much. And I have one more like broader theoretical [ph] question, I mean, given like a strong marketing of the bigger banks in terms of their online payment services and basically access to all online services available from the bigger banks, what do you think is your key competitive advantage now, because really results of the fourth quarter is tremendous, it’s really signaling you are doing something which no one else can do in the market, what do you think is the main thing here?

[Sergey Solonin:]

Yes, again as I said, we are -- what we are doing in 2017 and 2018, we are doing different tailored solutions for big clients. And this is something that usually big banks cannot do. Because big clients like Uber or others they require some specific components in the protocol. So usually it's not a standard thing. So all the other players in the market they do standard thing that we did before. And we do tailored things as we usually did on the payments side. So gateways -- we have direct gateways to merchants and these gateways can be right and have different functions instead of like to compare with cards maybe credit and debit cards where you have access to these merchants and you can pay. But the flexibility and functionality of those payments are very, very limited. So we will move forward with that strategy through 2018. And we think that protects us a lot from other players in the market. Thank you.

[Unidentified Analyst:]

Thank you very much.

[Operator:]

Our next question is from Bob Napoli with William Blair. Please proceed.

[Bob Napoli:]

Thank you. Just on SOVEST, I mean, what is your confidence level in success. I know you're saying Alexander you still -- if things go well this year, you should breakeven in 2019 with the additional competition that you're seeing. Is there a point where you decide that SOVEST is not a great idea and you would terminate your investment in SOVEST?

[Sergey Solonin:]

Hi, Bob this is Sergey. Well generally we think that still SOVEST is a very good idea. And the situation that we have that we have some of the banks and some of other players coming to this market actually supports the idea that the product is needed on the market. So we were first who came out with that product and now we have Alpha Bank and Home Credit Bank who are trying to do similar things and also Softkom Bank who are doing similar things. So of course it depends there are some larger banks that are still not there. And we don't know exactly how the competition will evolve from that point. But generally we now understand the model much better than it was before, than it was in the beginning of 2017. So we have our own experience on playing with the customers, acquiring customers. And we are -- I think we still have disparity on the other competition on the channels on the work with merchants, et cetera. So I think that the model should work at the multi-bank finally. So I don't see efficiency when every bank goes directly to the merchant -- for merchant and for end customer and bank as well. So I think that there should be a player like us who consolidate all this work and then distribute it to other banks. So I still believe that this is an efficient model how we'll finally come to, so to this model because it should be efficient you have one point of work with merchant and then you have many distribution points as banks and others. But specific to our market and usually we have like a pass through like learning pass through market. And most of the big banks like wants to try themselves. And I'm -- I think that most of these trials will be failed. So I don't see any efficiency for the banks to do that. They don't have these personnel who should work with merchants on the specific issue. And also they don't have systems to support this work. So I believe that it is still a good model, but we can go through some kind of rough competition and that's normal. So we see the numbers we see that the model works. And we believe that if we will prove to the market that multi-bank model should be there and is much more efficiency than doing it in every bank in-house. So if we’ll be able to prove that, then it will be very, very good project. If not, then there are other options that we will think of.

[Bob Napoli:]

And to be clear, right now you are holding the loans and taking the credit risk, but the model -- the bank model as you sign bank partners you will not hold the loans on your balance sheet at all you will take a commission, you will not have any of the asset risk or credit risk, is that correct?

[Sergey Solonin:]

Yes, absolutely. That’s where -- the problem when we launched the project was that we couldn’t agree with banks on this product and because there was no brands, so like technically everyone wanted white label and we didn’t see any sense in doing that. Now -- and that’s why we decided to starting our own balance to push the brands to make sense in terms of the business negotiations for the banks. And we showed output then some banks followed to try themselves. We still think that it is not efficient, so we still think that other banks with whom we are talking right now, agreed that it is not efficient to every bank to do those models, because they are very brand specific and they are heavy on marketing. So, I don’t believe that there will be a lot of cards and maybe just a few touch cards on the market. And I think that we’ll finally come to this model, but right now, yes, right now we started to make loans from our balance sheet, because we couldn’t find initial partners, but we want to finish that as soon as we find enough partners -- bank partners and we’ll transfer all those loans to their balance sheet.

[Bob Napoli:]

Okay, and you’ll announce whenever you sign up those partners, you’ll probably do a press release or something, so we’re aware?

[Sergey Solonin:]

Yes, yes, we’ll announce first launch.

[Bob Napoli:]

And then on your core business, I mean, you had nice acceleration in the e-commerce and the money transfer business and I think the same trends Financial Services and Telecom continue to be soft, that trend know the acceleration in e-commerce is due to the partnerships as you mentioned or projects with Alibaba and Airbnb, Uber and like that and those trends and those segments do you expect that those trends to continue as you look into 2018 and 2019?

[Sergey Solonin:]

Yes, yes, we will increase the number of partners in 2018. We just started some programs in the fourth quarter. So they will continue of course throughout the year and also they will expand because the projects are not at full right now. So we will expand, the client base will expand also all the numbers within our current clients, so yes I think that this is a strategic choice for QIWI right now.

[Bob Napoli:]

Can you give us an update on the first quarter, since we are through the first quarter pretty much?

[Alexander Karavaev:]

If you know it, Bob what can be the growth in the first quarter.

[Bob Napoli:]

Right, yes, the payment volume growth in the first quarter?

[Alexander Karavaev:]

Well, we are not guiding on that, but it should more or less correspond to the growth that you have noted in Q4.

[Bob Napoli:]

Okay, no acceleration or deceleration that you are seeing.

[Alexander Karavaev:]

Exactly, that’s what we see.

[Bob Napoli:]

Thank you very much.

[Operator:]

[Operator Instructions]. We have a follow-up question from Ulyana Lenvalskaya. Please proceed.

[Ulyana Lenvalskaya:]

Thank you. Just a quick additional follow-up, what is the company’s current net cash position on the balance sheet at the end of the year?

[Alexander Karavaev:]

So it’s -- well it’s slightly below $100 million, and unfortunately for SOVEST and other projects. But it has not changed dramatically in Q3.

[Ulyana Lenvalskaya:]

Okay. And I am also curious, what is the current share of cash top-up in e-wallet, if you can comment on those.

[Varvara Kiseleva:]

Again the information is disclosed in 20F, you can just take a look at.

[Ulyana Lenvalskaya:]

Fine. Thank you, guys.

[Sergey Solonin:]

Thank you.

[Alexander Karavaev:]

Thank you.

[Operator:]

We have a follow-up question from Vladimir Bespalov with VTB Capital. Please proceed.

[Vladimir Bespalov:]

Thank you for taking my follow-up question, just a quick one. Some time ago you mentioned that you’re working on a new strategy, PF strategy I believe. So when are you going to disclose that, could you give us some color on this work?

[Sergey Solonin:]

We're going to have road show in the near future and we will be disclosing strategy at the same time. It's end of April, I think, end of April.

[Vladimir Bespalov:]

Thank you very much.

[Operator:]

[Operator Instructions] And we have a follow-up from Bob Napoli with William Blair. Please proceed.

[Bob Napoli:]

Thank you for taking my question. I just -- I mean, on my clear on your strategy with the Tochka project and how that relates to the core business or new strategies at QIWI?

[Sergey Solonin:]

Well we are still unclean on the deal with Tochka finally, so we will -- I think we will be able to finalize soon. And small and medium business is one of the target audiences in our strategy. So, we do work with self-employed and small and medium. So we think that this is our -- one of our target orients to work with for the future. But we cannot say much about Tochka right now because we are now agreeing with Otkritie on this final step-up of Tochka. And we think well within month or few months we will be able to show up what kind of corporation we lead on. Generally we -- both sides are doing a lot of work towards building this project and towards building strategy around it. So we will be able to answer that as soon as we complete the contract with Otkritie Group.

[Bob Napoli:]

Alright. Thank you.

[Operator:]

We have reached to end of our question-and-answer session. I would like to turn the call back over to management for closing remark.

[Sergey Solonin:]

So thank you very much for the meeting. We are as management very happy for the results. And I hope to hear you on the next earnings call. Thank you very much. Bye-bye.

[Operator:]

Thank you. This concludes today's conference. You may disconnect your lines at this time. And thank you for your participation.