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Edited Transcript of QIWI earnings conference call or presentation 19-Aug-19 12:30pm GMT

Q2 2019 Qiwi PLC Earnings Call

NICOSIA Sep 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Qiwi PLC earnings conference call or presentation Monday, August 19, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andrey Protopopov

Qiwi plc - Head of IT & Product

* Sergey A. Solonin

Qiwi plc - CEO & Director

* Varvara Kiseleva

Qiwi plc - Deputy CFO for Capital Markets & Head of IR

* Vladislav Poshmorga

Qiwi plc - CFO

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Conference Call Participants

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* Andrey Pavlov-Rusinov

Goldman Sachs Group Inc., Research Division - Research Analyst

* Anna Kurbatova

Joint Stock Company Alfa-Bank, Research Division - Senior Analyst

* Anna Kazaryan

VTB Capital, Research Division - Equities Analyst

* Cristopher David Kennedy

William Blair & Company L.L.C., Research Division - Associate

* Maria Sukhanova

BCS Financial Group, Research Division - Research Analyst

* Svetlana Sukhanova

Sberbank CIB Investment Research - Senior Analyst

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the QIWI Second Quarter 2019 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Mrs. Varvara Kiseleva, Deputy CFO of QIWI. Please go ahead.

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [2]

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Thank you, operator, and good morning, everyone. Welcome to the QIWI second quarter earnings call. I'm Varvara Kiseleva, Deputy CFO, and with me today are Sergey Solonin, our Chief Executive Officer; Andrey Protopopov, Chief Executive Officer of the Payment Services segment; and Vladislav Poshmorga, our Chief Financial Officer.

A replay of this call will be available until Monday, December 2, 2019. 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 August 19, 2019.

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. These 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 statements 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 today's call, management will provide certain information that will constitute non-IFRS financial measures, such as adjusted net revenue, adjusted EBITDA, adjusted net profits and adjusted net profit per share. Reconciliations to IFRS measures and certain additional information is also included in today's earnings press release.

With that, we'll begin by turning the call over to Sergey Solonin, our Chief Executive Officer.

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Sergey A. Solonin, Qiwi plc - CEO & Director [3]

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Thank you, Varvara, and good morning, everyone. Thanks for joining us today.

I'm very excited to share our second quarter results with you today. This quarter, we have demonstrated exceptional performance. Our Payment Services business delivered 35% segment net revenue and 42% segment net profit growth, securing strong results for the first half of 2019. Our growth was driven by the robust performance in our key strategic streams, Payment Services for digital entertainment merchants, digital money remittances and projects to develop for self-employed and sharing economy partners as well as by the general expansion of our payment ecosystem. I'm glad to acknowledge that the strong performance of our Payment Services business was largely driven by the expansion and scaling of our operations and enhancements of our product proposition we offer to our users, merchants and partners.

This quarter, we continued to invest in the development of our Financial Services project primarily SOVEST and Rocketbank, while Tochka project has reached breakeven and booked some positive net profit this quarter. I will walk you through some latest developments in these segments in just a moment.

Overall, I believe that our performance clearly demonstrates the value of our ecosystem. It also serves as a solid foundation for the future growth and an important step forward in achievement of our midterm goals that we have provided last year.

The significant cash flows that generated by our core Payments business support our strategy and allow us to carry on with investing in new products and projects in financial and payments spaces in order to secure the long-term growth prospects of our company.

Now onto some operating highlights. But before we move on, I would like to introduce you to my colleagues who are here with me today. First, I'm glad to announce that Andrey Protopopov, who formerly served as our head of product and IT, has been appointed as our Chief Executive Officer of our Payment Services business. He will be running the day-to-day operations of the segment, developing and implementing strategy. Andrey has been with the company for over 6 years and has taken leading roles with marketing products and IT. Moreover, he was practically leading the Payment Services business, while I was on my trip earlier this year. I'm very glad that Andrey has taken this responsibility and will continue to lead our Payments business in the CEO role. He will walk you through the latest developments in the segment in just a moment.

I'm also glad to introduce you to Vladislav Poshmorga, our new CFO, who is also here with me today. Vlad will walk you through the second quarter numbers in more detail shortly, while I would like to share with you some recent developments.

Second quarter 2019 total adjusted net revenue increased by 23% to reach RUB 5.6 billion, up from RUB 4.5 billion in the second quarter of 2018. The increase was mainly driven by Payment Services and Consumer Financial Services segment net revenue growth. The growth was likely offset by the decrease in the SME segment net revenue and negative net revenue contribution of Rocketbank segment.

Our Consumer Financial Services segment payment volume reached RUB 5.8 billion for the second quarter of 2019, increasing by 82% as compared to the same period of the prior year. Consumer Financial Services segment net revenue was RUB 283 million for the second quarter 2019 as compared with RUB 58 million in the second quarter of the prior year, demonstrating the development of the SOVEST project. During the last several quarters, we have enhanced the product offering and improved the monetization of the project. At the same time, we continue to explore potential opportunities to support and reinforce the scaling of the project.

Our SME segment, which we developed through Tochka multibank platform together with Otkritie Bank, continued to demonstrate robust operating financial performance in the second quarter 2019, as I have just mentioned. At the same time, its net revenue decreased by 69% to RUB 185 million for the second quarter of 2019, mostly as a result of the transfer of Tochka operations to JSC Tochka that happened on February 1, 2019.

This month, we have also finalized and presented to the Board of Directors of QIWI the new Rocketbank strategic plan. We envision Rocket as a fintech company with a mission to simplify everyday relations with money for generations Y and Z. Rocket aims to transform how people spend, save, earn, receive salary, invest, get best deals, keep track on expenses and use credit funds. It will enable customers to do all of these together with friends and their communities in a convenient mobile application without having to go to the bank branch.

Rocket team will continue doing what it does the best, building innovative interfaces and mechanics that combines convenient services and essential banking products. Today, Rocket team is developing 3 main product streams: a new financial tool for self-employed and freelancers; an innovative application for getting the most benefits, bonuses, privileges and using this bonus when making purchases; a simple application for saving and investing. By the end of 2019, Rocket aims to reach over 400,000 of active clients and begin a new chapter over its history as a stand-alone fintech company.

Following the detailed discussion, our Board of Directors concluded that the strategic plan of Rocketbank suggested by the management has limited synergy potential with the core business of QIWI and did not suit QIWI's risk appetite. In the next couple of months, we will explore further opportunity to partial or complete sale of the project, focusing on raising investments to fund the development and growth of this project. We will provide an update on this process as soon as practical. At the same time, we will continue investing in the development of new product and acquisition of customers to secure that we are able to achieve the best possible deal.

Further, I'm glad to announce that following the determination of the second quarter 2019 financial results, our Board of Directors has approved a dividend of RUB 0.28 per share, keeping the nominal per share payout constant as compared to the previous quarter. In accordance with the decision of the Board announced earlier this year, we aim to distribute between 65% to 85% of our adjusted net profit for 2019, starting from the first quarter 2019. We believe that distributing excess cash to the shareholders is a good practice and aim to provide maximum transparency and consistency in this respect going forward.

With this, I will turn the call over to Andrey for an update on the Payment Services segment. Andrey?

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Andrey Protopopov, Qiwi plc - Head of IT & Product [4]

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Thank you, Sergey, and good morning, everyone. It's my pleasure to be here with you today.

Now on the results of our Payment Service segment. For the second quarter 2019, our Payment Service segment volume increased by 41% to reach RUB 371 billion driven by significant growth in E-commerce, Financial Services and Money Remittance vertical, which grew 74%, 52% and 43%, respectively. The growth in E-commerce and Money Remittance verticals was largely driven by the development of our key streams, mainly digital entertainment, self-employed and sharing economy partners, where we're able to expand our partner and merchant network, build up our relations with our existing partners and expand our product offering. This growth was reinforced by secular market trends, while growth in Financial Service category was driven primarily by the new distribution contracts.

Payment Service segment net revenue increased 35% to reach RUB 5.2 billion compared to RUB 3.8 billion in the prior year. Payment Service adjustment net revenue increased 31% to RUB 4.4 billion, up from RUB 3.4 billion in the prior year as a result of the net revenue growth in our Money Remittance and E-commerce verticals, which grew 73% and 25%, respectively, partially offset by a slight decline in net revenue in other verticals.

Our financial results in this segment were predominantly driven by increasing volumes. Our payment average adjusted net revenue yield was down by 9 basis points year-over-year to 1.19% driven by the yield decline across all key categories. Such decline was driven by our focus on increasing the scale of our business as we started offering our merchants and partners new services, such as online acquiring, which makes up lower commissions [than] our Qiwi Wallet product proposition. The growth of this new business stream diluted payment average adjusted net revenue yield primarily in the E-commerce category, while the commissions we charge in our core solutions remained unchanged.

Payment Service other adjusted net revenue increased 59% to 760 -- RUB 746 million as compared to RUB 470 million in the prior year as a result of growth of revenue from fees from inactive accounts, unclaimed payments and interest revenues. This is in line with our overall growth and scaling of our strategy.

As Sergey mentioned earlier, our growth was driven by the robust performance we have achieved in our key strategic streams and through the expansion and enhancement of the product proposition we offer to our users, merchants and partners. We believe that we are well positioned to continue growing our business by reaching our suite of services in these areas, while we aim to further improve our key solutions and use cases and develop new strategic niches to support our longer-term growth.

With this, I will pass over to Vladislav for more details on the financial performance of the group. Vladislav?

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Vladislav Poshmorga, Qiwi plc - CFO [5]

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Thank you, Andrey, and good morning, everyone.

Moving on to expenses. Profit operating performance of our Payment Services business has continued to generate substantial cash flows, supported our investments in the development of our new projects.

Our net revenue growth outpaced the growth of the expenses supported by the improving operating leverage. This being said, adjusted EBITDA increased 90% to RUB 2.6 billion from RUB 1.4 billion in the prior year. Adjusted EBITDA margin was 47% compared with 31% in the prior year. Adjusted EBITDA margin expansion primarily resulted from adjusted net revenue growth as well as the decline in payroll and related taxes related to the cost of revenue and advertising, client acquisition and related expenses partially offset by the increase in compensation to employees and related taxes related to SG&A expenses as well as an increase in credit loss expenses incurred due to the scaling up of the service project and increase in other expenses related mostly to the transfer of the operations of Tochka multibank project.

Group adjusted net profit increased 125% to RUB 2 billion from RUB 0.9 billion in the second quarter of the prior year. Adjusted net profit was largely affected by the same factors as adjusted EBITDA as well as smaller net foreign exchange loss as compared to the same period in the prior year.

Payment Services segment net profit increased 42% to RUB 3.2 billion compared with RUB 2.3 billion in the prior year driven primarily by Payment Services segment net revenue growth and certain expenses that we performed and will be caught up during the year.

Consumer Financial Services segment net loss was RUB 435 million in the second quarter of 2019 that compared to a net loss of RUB 702 million in the same period of the prior year, resulting from the expansion of the operations of the SOVEST project, improvement of user economics, as Sergey previously mentioned as well as optimization of certain expenses.

SME segment net profit was RUB 16 million as compared to RUB 263 million net loss in the second quarter of 2018. Substantial reduction of SME segment net loss resulted primarily from growth and development of the Tochka business.

Rocketbank segment net loss was RUB 511 million for the second quarter of 2019 as compared to the net loss of RUB 97 million for the same period in 2018. The substantial increase in net loss was primarily driven by expenses incurred in connection to transfer and commencement of Rocketbank operations in QIWI, including primarily personnel expenses as well as client acquisition and marketing cost.

Now onto our guidance. Firstly, I would like to remind you of certain accounting changes that are embedded in our 2019 guidance. We have ceased, starting from February 1, 2019, to recognize part of Tochka revenues associated with information and technology service agreement with Otkritie Bank to providing services to Tochka clients that have their accounts with Otkritie Bank as Tochka business was transferred to a separate legal entity, JCS Tochka. Such revenues were recognized in full for the full year 2018. However, they will only be recognized for 1 month in 2019. For the avoidance of doubt, only the revenues related to Tochka clients that have their accounts with QIWI Bank are recognized as QIWI group revenues starting from February 1, 2019. We will correspondingly account JCS Tochka as an equity associate. This being said, we upgrade our 2019 guidance to reflect strong performance of our Payment Services business and underlying trends that we currently observe.

We expect group adjusted net revenues to increase by 11% to 16% over 2018; Payment Services segment net revenue to increase by 23% to 27% over 2018, while Payment Services segment net profit is expected to increase by 25% to 29% over 2018 to reflect the operating leverage in the business.

We reiterate group adjustment net profit guidance to reflect our current expectation in regard to the investment we are likely to ensure this year in connection with the implementation of certain strategic initiatives in Rocketbank that are aimed at securing the best potential deal for this project. Thus, group adjusted net profit is to increase by 40% to 50% over 2018.

Although we show second quarter results as a solid foundation for the future growth, certain other factors remain beyond our control and, hence, we reserve the right to revise guidance in the course of the year.

With that, operator, please open up the call for the questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Cris Kennedy with William Blair.

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Cristopher David Kennedy, William Blair & Company L.L.C., Research Division - Associate [2]

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Sergey, can you provide an update on your latest thinking on the multibank model and your ability to scale SOVEST?

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Sergey A. Solonin, Qiwi plc - CEO & Director [3]

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Cris, thank you for your question. Yes, we are currently under the testing period with one of the banks, with AK Bars Bank. And I think we issued around 30,000 cards together with this bank, and we have a few more banks in line. So I would say that I'm very positive on the ability to work with banks in a multibank model. So I think that we will discuss it on the next Board meetings about the next phase of the project on the multibank. So in the midterm, we definitely will not have account balances on QIWI balance, so it will be done on multibank.

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Cristopher David Kennedy, William Blair & Company L.L.C., Research Division - Associate [4]

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Okay. Great. And then just one more. And you mentioned -- you alluded to your midterm guidance that was provided at your Investor Day. Can you just give us your latest thinking on that and your ability to achieve those targets?

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [5]

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Cris, this is Varvara. So as we said on the call, we are on a new track to achieve the guidance that we have provided during our Investor Day. We are well on with the Payment Services business overperforming our current expectations. We reiterate the midterm guidance, no change to that yet. But we believe that we are on a good track with our 3 main streams. For the -- and definitely, as we have already said, the core of the results and the core of the increase in the scale of business and net profit -- both net revenue, and net profit guidance lies within the growth of the Payment Services business. Most other businesses, including Tochka and SOVEST, are now as well in the budget and well in the midterm plan that was underlying the guidance that we have provided during the Investor Day.

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Operator [6]

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Our next question comes from the line of Sveta Sukhanova with Sberbank.

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Svetlana Sukhanova, Sberbank CIB Investment Research - Senior Analyst [7]

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First of all, congratulations with the strong beat on the second quarter results. My first question would be on your guidance. And traditionally, you do expect a significant slowdown in the second half of the year, especially on the net profit front, I mean including Payment Services and overall adjusted. So these have kind of slowed down in the year or you're traditionally conservative? And if it is real, what should be the underlying reasons for such slowdown? If I will ask just -- I will ask a second question after you answer the first point.

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [8]

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Sveta, this is Varvara again. So as to our Payment Services guidance, we do expect certain slowdown in the growth rate in the second half of the year, mostly because of the high base effect that kicks in from the third quarter. That's for the net revenue growth. For the net profit growth, as we mentioned in our press release, we do expect that there will be certain additional expenses mostly connected with the shift of the certain compensation programs from share-based nature to the cash-based nature that will add some cost to the Payment Services net profit. Though we believe that there will be operating leverage and the operating leverage in the Payment Services segment will be maintained.

As for the overall group guidance, we expect that the cost for the development of Rocketbank will be slightly above those embedded in our previous guidance, so that, given the increase of the Payment Services net profit guidance, we reiterate the net profit guidance for the group. Otherwise, of course, as usual, we are trying to be conservative.

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Svetlana Sukhanova, Sberbank CIB Investment Research - Senior Analyst [9]

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Very clear. My second question would be about the E-commerce and Money Remittances. So I caught from Andrey's speech why your yields in the E-commerce segment are under pressure is because of this online acquiring. But can you please kindly elaborate on the Payment Service revenues? Why is the -- why do they slow down? And why do Money Rem net revenues so much accelerated in the second quarter?

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Andrey Protopopov, Qiwi plc - Head of IT & Product [10]

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Thank you for the question. For the Money Rem in the second quarter, we were successful in our key streams, including the self-employed, working businesses and the payout program. And those volumes are going to the Money Rem. As well as self-employed entrepreneurs, which use our Qiwi Wallet to run their businesses, they're growing as well, where [internal] peer-to-peer between wallets and sending money from the wallets to their bank cards were growing as well, and this is also going to the Money Rem category. And then also I've shared that those type of payments within the Money Rem categories are more marginal. That's why you can observe the yields in the Money Rem is higher versus prior periods.

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Svetlana Sukhanova, Sberbank CIB Investment Research - Senior Analyst [11]

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Apologies, but may I ask a follow-up question on Money Rem? Do your payout, this win rate -- I mean what I'm trying to ask is how Money Rem are affected by the betting revenues. And that kind of acceleration of Money Rem, I would think about payout, about self-employed, et cetera. But yes, is that kind of Money Rem acceleration somehow connected with the betting business and with the payouts to them from the betting business to the wallet people forward to -- using the same peer-to-peer money transfer, et cetera, et cetera? So the question, is it somehow connected with betting businesses now?

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Andrey Protopopov, Qiwi plc - Head of IT & Product [12]

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It is partially connected with the betting businesses as well because part of the payout is going directly to the bank card, is going to the Money Rem, while the volume that is going to the payout of [things to develop] is not reflected in the -- our volumes of the category since it's top-up -- part of our wallet top-up. So it's partially connected, but the main growth of this category is driven by other factors, as I already mentioned, and (inaudible) is not big.

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Svetlana Sukhanova, Sberbank CIB Investment Research - Senior Analyst [13]

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Very clear. And what about E-commerce revenue slowdown?

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Andrey Protopopov, Qiwi plc - Head of IT & Product [14]

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Actually, the main reason is the high base in the last year because of the World Cup and the high betting volumes on this period last year.

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Operator [15]

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Our next question will be coming from the line of Anna Kazaryan with VTB Capital.

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Anna Kazaryan, VTB Capital, Research Division - Equities Analyst [16]

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My first question is about your adjusted EBITDA. So do I understand correctly that adjusted EBITDA growth for -- in the second quarter included some impact of one-off, some one-off from incentive program or from IFRS 16 maybe? If I understand it correctly, what was an organic EBITDA growth without this one-off? And what might be future impact of such one-offs? It's my first question.

My second question, could you please clarify -- sorry, if I missed it. Do I understand correctly that your full year guidance include expenses for Rocketbank. And so do you -- can you explain how much do you plan to invest into Rocketbank by year-end?

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [17]

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Anna, so for your first question, there was an effect of IFRS 16 in the EBITDA numbers. It's roughly 2%. So the EBITDA will be slightly -- the EBITDA margin would be slightly less without the effect of IFRS 16. As for the one-offs, I would like to clarify that this would affect the numbers going further, so we would have some additional expenses in the Payment Services business that would slightly affect EBITDA margin going forward in the second half of the year. But this didn't affect the EBITDA margin in the first half of the year. So in this respect, we believe that the EBITDA margin will be more or less favorable throughout the year, probably slightly decreasing for the group because of the Rocketbank cost. All one-offs are more or less immaterial, maximum 2% of adjusted EBITDA margin effect overall.

And for your second question for Rocketbank, you're absolutely right. All expenses that we currently anticipate for Rocketbank are included in the current guidance. And the cost that we expect for the second half of the year of Rocket can be up to RUB 2 billion. That's what has been discussed.

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Operator [18]

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(Operator Instructions) Our next question is from the line of Maria Sukhanova with BCS Global.

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Maria Sukhanova, BCS Financial Group, Research Division - Research Analyst [19]

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Congrats from my side, too. Great results. I have a question about SOVEST. You mentioned that economics are improving. I wonder if you could share with us, like, any data points. So like, for instance, half a month -- half a year ago, you said that it's becoming breakeven, like the cohort attracted is becoming breakeven at 27 months. I wonder if -- how it's changed so far. And maybe if you could share with us how many cards you have issued in total or like loans issued or something like that.

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [20]

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Maria, so as per the unit economics and for the monetization of the project, we indeed have improved the unit economic and monetization as compared to the previous year mostly through the consumer value-add options that we have introduced last June. That was really a good driver for the increase in net revenues.

As for the cohorts, the behavior is more or less the same. So the behavior and the results of the newly acquired cohort is more or less the same as we've discussed with you earlier. We don't see any significant changes neither of in cost of consumer acquisition or in cost of risk. So it's more or less in line with what we have historically seen. And regarding the number of cards, this summer, we have surpassed 1 million of cards distributed to SOVEST customers.

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Operator [21]

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The next question comes from the line of Anna Kurbatova with Alfa-Bank.

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Anna Kurbatova, Joint Stock Company Alfa-Bank, Research Division - Senior Analyst [22]

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I wonder about your progress with the new strategy development that you announced several months ago that -- it was announced that in August, you were to submit a new strategy to the Board of Directors. So could you give us some update in this regard?

And my second question is about potential and future sale of Rocketbank. I wonder what -- would you give a partial sale of the asset because as far as I understand, the full sale would enable you to deconsolidate the assets and losses and to attract or to -- like no need -- you will have no need for investments, but what you seek with the partial sale?

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Sergey A. Solonin, Qiwi plc - CEO & Director [23]

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Thank you, Anna, for your question. First of all, about the strategy, we presented our product strategy on the Board of Directors, which was generally accepted. And we also presented our ideas about the partial sale of the project because of the reasons we mentioned in our speech today. So we are -- we will be working in line with this strategy. And we understand that during -- up to the end of the year, we will be clear with the investors how it will be done. We definitely aim to deconsolidate Rocketbank from QIWI. So we aim to sell -- make a partial sale of the majority stake in this project and develop it with investors' money.

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Operator [24]

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Our next question is from the line of Andrey Pavlov-Rusinov with Goldman Sachs.

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Andrey Pavlov-Rusinov, Goldman Sachs Group Inc., Research Division - Research Analyst [25]

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I've got a couple of follow-up questions. First of all, on E-commerce dynamics, could you please give us a sense of out of this 25% year-on-year growth in net revenues there, what is growing faster, the betting, revenues or the rest of the E-commerce?

And also my second question is with regards to the SOVEST. Basically, could you please give us a sense of what kind of level of investments do you expect in this business in the second half of the year? And when should we actually approach the breakeven?

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Andrey Protopopov, Qiwi plc - Head of IT & Product [26]

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Andrey, thank you for your question. I will take the first one. So regarding the E-commerce category, betting has more or less the same growth rate as other parts of this business.

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Sergey A. Solonin, Qiwi plc - CEO & Director [27]

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Yes. And on the second question, we were planning to spend around RUB 1 billion in total, and our plan is to be breakeven in the mid-2020.

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Andrey Pavlov-Rusinov, Goldman Sachs Group Inc., Research Division - Research Analyst [28]

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And just to -- basically to understand better. If I look -- if I see directly the Consumer Finance -- Financial Services had a loss of about RUB 1 billion during the first half, so it's essentially -- this will be it in terms of the investments.

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [29]

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No, no, Andrey. The total investments in SOVEST for 2019 will be around RUB 2 billion, RUB 1 billion in the first half and RUB 1 billion in the second half.

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Operator [30]

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(Operator Instructions) The next question is from the line of Sveta Sukhanova with Sberbank.

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Svetlana Sukhanova, Sberbank CIB Investment Research - Senior Analyst [31]

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If I may, a follow-up question on betting again. So if we assume -- so my first question in betting could be if you can kindly disclose or give us some kind of hint what percent of betting revenues as of your total payment revenues. Is it more than 30%? How significant -- any hint would be much appreciated.

And second question in betting would be if I look at 100% of your betting revenues, how would this be separated between E-commerce and Money Remittances segment because when asked about Money Remittances segment, the effect of betting, the answer was it's pretty insignificant for the acceleration? But how significant betting revenues for Money Remittances segment and the split between E-commerce and Money Remittance?

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [32]

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Sveta, so in terms of the split between categories, digital entertainment category, overall, the majority consist of the major part of the E-commerce category. We do not disclose separately the betting revenues. And if we're discussing the contribution of betting in E-commerce and Money Remittance, the major part by far would be booked into E-commerce category.

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Svetlana Sukhanova, Sberbank CIB Investment Research - Senior Analyst [33]

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That's very clear. A quick question, a quick follow-up on digital entertainment. What else do you include in digital entertainment? Is it games or it's pretty much all E-commerce? Or what is it, in fact?

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Varvara Kiseleva, Qiwi plc - Deputy CFO for Capital Markets & Head of IR [34]

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That's online. That's online games, social network, some parts of the donations and e-sports, cyber sports, et cetera, everything which you can basically call digital entertainment.

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Operator [35]

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At this time, we have reached the end of our question-and-answer session. That will also conclude our conference for today. Thank you for your participation. You may now disconnect your lines at this time.

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Andrey Protopopov, Qiwi plc - Head of IT & Product [36]

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Thank you.