Yandex N.V. (NASDAQ and MOEX: YNDX) (“Yandex,” “we” or the
“Company”), one of Europe’s largest internet companies and the
leading search and ride-hailing provider in Russia, today announced
a proposed public offering of $200 million newly issued Class A
shares. In addition, Yandex intends to grant the underwriter a
30-day option to purchase up to an additional $30 million of its
Class A shares. All Class A shares to be sold in the proposed
public offering will be offered by Yandex. Goldman Sachs & Co.
LLC is acting as the sole bookrunner and underwriter for the
proposed public offering.
Concurrent with the proposed public offering,
Yandex intends to sell, subject to the consummation of the public
offering and other customary conditions, in a private placement
exempt from the registration requirements of the Securities Act of
1933, as amended (the “Securities Act”), $200 million of its Class
A shares to each of three private investors. The sale price per
Class A share in the concurrent private placement will be equal to
the lesser of (i) the offering price in the public offering, and
(ii) the product of 1.05 and the volume-weighted average sale price
of our Class A shares on NASDAQ on June 23, 2020, for aggregate
gross proceeds of $600 million. The investors in the proposed
private placement (the “Investors”) are JSC VTB Capital, the
investment business arm of VTB Group, a Russian bank and global
provider of financial services; Ervington Investments Limited, a
company whose ultimate beneficiary is Roman Abramovich; and
Treliscope Limited, a company whose ultimate beneficiaries are
Alexander Abramov and Alexander Frolov. The consummation of the
public offering is not contingent on the consummation of the
concurrent private placement. Goldman Sachs International is acting
as the sole placement agent for the concurrent private
placement.
Yandex intends to use the proceeds from the
proposed public offering and concurrent private placement to
maintain financial flexibility and fund future growth and strategic
opportunities across multiple sectors, including e-commerce.
At the closing of the concurrent private
placement, we and each of the Investors will enter into investor
agreements setting forth certain rights, covenants and obligations
of the parties. Pursuant to the investor agreements:
- each of the Investors will be prohibited from disposing of the
Class A shares purchased in the concurrent private placement for a
period of two years, subject to certain exceptions;
- each of the Investors and their respective affiliates for a
period of two years will be restricted from acquiring beneficial
ownership of Class A shares representing more than 3.99% of our
outstanding ordinary shares, subject to certain exceptions;
and
- in the event that we seek third-party financing for
Yandex.Market or certain other of our e-commerce businesses over
the next two years, each of the Investors will have certain rights
to negotiate with us with a view to participating in such
financings. That period may be extended by an Investor by up to one
further year, if such Investor agrees to extend its lock-up and
standstill obligations for such period.
We will also grant the investors customary
registration rights in respect of the Class A shares acquired in
the concurrent private placement.
Yandex has also announced today that it has
entered into a binding framework agreement with Sberbank of Russia
(“Sberbank”), pursuant to which Yandex will acquire Sberbank’s
entire stake in our Yandex.Market joint venture, and Sberbank will
acquire our entire interest in our Yandex.Money joint venture
(together, the “Sberbank Transactions”). Under the terms of the
transaction, Sberbank will sell all of its shares in Yandex.Market
(45%) to Yandex for a cash consideration of RUB 42 billion (based
on the implied equity valuation of the business of RUB 87.3
billion). At the same time, Yandex will sell its participatory
interest in Yandex.Money (25% plus one ruble) to Sberbank for
approximately RUB 2.4 billion.
The net consideration payable by Yandex in these
transactions will be RUB 39.6 billion (approximately $570 million).
The Sberbank Transactions are subject to customary closing
conditions, including regulatory approvals, and are expected to
close in the third quarter of 2020. Following closing of the
Sberbank Transactions, the consolidated financial results of Yandex
will include the results of Yandex.Market.
In addition, Yandex today is providing its
preliminary estimated financial results for the three months ending
June 30, 2020, which are attached to this press release.
The proposed public offering will be made only
by means of a preliminary prospectus supplement and the
accompanying prospectus. A copy of the preliminary prospectus
supplement and the accompanying prospectus relating to the proposed
public offering has been filed with the Securities and Exchange
Commission (the “SEC”) and may be obtained, when available, by
visiting EDGAR on the SEC website at www.sec.gov or from Goldman
Sachs & Co. LLC, Attention: Prospectus Department, 200 West
Street, New York, NY 10282, or by telephone at (866) 471-2526 or by
email at prospectus-ny@ny.email.gs.com. The final terms of the
proposed public offering will be disclosed in a final prospectus
supplement to be filed with the SEC.
The Class A shares being offered in connection
with the proposed public offering are being offered by Yandex
pursuant to its shelf registration statement on Form F-3, including
a base prospectus, that was previously filed by Yandex with the SEC
on June [23], 2020 utilizing an automatic shelf registration
process. The Class A shares to be sold in the concurrent private
placement have not been registered under the Securities Act or
under any other jurisdictions and, unless so registered may not be
offered or sold in the United States except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be
any sale of securities, in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About Yandex
Yandex (NASDAQ and MOEX: YNDX) is a technology
company that builds intelligent products and services powered by
machine learning. Our goal is to help consumers and businesses
better navigate the online and offline world. Since 1997, we have
delivered world-class, locally relevant search and information
services. Additionally, we have developed leading on-demand
transportation services, navigation products, and other mobile
applications for millions of consumers across the globe. Yandex,
which has 34 offices worldwide, has been listed on the NASDAQ since
2011.
Contacts:
Investor RelationsYulia GerasimovaPhone: +7 495
974-35-38E-mail: askIR@yandex-team.ru
Press Office
Ilya GrabovskiyPhone: +7 495 739-70-00E-mail:
pr@yandex-team.com
Forward-Looking Statements
This press release contains forward looking
statements within the meaning of Section 27a of the Securities Act
and Section 21e of the Securities Exchange Act of 1934, as amended,
including statements regarding the timing and size of our proposed
public offering and the concurrent private placement, our
expectations with respect to granting the underwriters a 30-day
option to purchase additional Class A shares in the proposed public
offering, our expectations with respect to the execution and
effects of the investors agreement, and other statements identified
by words such as “could,” “expects,” “intends,” “may,” “plans,”
“potential,” “should,” “will,” “would,” or similar expressions and
the negatives of those terms. Forward-looking statements are not
promises or guarantees of future performance and are subject to a
variety of risks and uncertainties, many of which are beyond our
control, and which could cause actual results to differ materially
from those contemplated in such forward-looking statements. The
potential risks and uncertainties that could cause actual results
to differ from the results predicted or implied by such statements
include, among others, macroeconomic and geopolitical developments
affecting the Russian economy or our business, particularly in
light of the COVID-19 pandemic, changes in the political, legal
and/or regulatory environment, competitive pressures, changes in
advertising patterns, changes in user preferences, technological
developments, and our need to expend capital to accommodate the
growth of the business, as well as those risks and uncertainties
included under the captions “Risk Factors” in our Annual Report on
Form 20-F for the year ended December 31, 2019.
PRELIMINARY FINANCIAL
RESULTS
FOR THE THREE MONTHS ENDING JUNE 30,
2020
Set forth below are preliminary estimates of
certain unaudited financial information for the quarter ending June
30, 2020 and actual unaudited financial results for the comparative
period ended June 30, 2019. We have provided ranges, rather
than specific amounts, for the preliminary estimates primarily
because our financial closing and review procedures for the three
months ending June 30, 2020 are not yet complete. JSC KPMG has not
audited, reviewed, compiled or performed any procedures with
respect to the preliminary results. Accordingly, JSC KPMG does not
express an opinion or any other form of assurance with respect
thereto. The estimated ranges are preliminary and are inherently
uncertain as a result of a number of factors, including foreign
exchange fluctuations between the Russian ruble and the U.S.
dollar, and remain subject to changes as we complete our financial
closing and review procedures for the three months ending June 30,
2020. The preliminary estimates set forth below do not give effect
to the closing of the Sberbank Transactions described above, and do
not include our third-party fees and expenses incurred in
connection with the Sberbank Transactions, the concurrent private
placement or this offering. The preliminary estimates set forth
below have been prepared by, and are the responsibility of, our
management. Although we currently expect that our final results
will be consistent with the preliminary estimates set forth below,
we caution you that the estimated financial information for the
three months ending June 30, 2020 is not a guarantee of future
performance or outcomes and actual results may differ materially
from those described herein. You should read this information
together with the “Operating and Financial Review and Prospects”
section of our Annual Report on Form 20-F for the year ended
December 31, 2019, and our Current Report on Form 6-K for the three
months ended March 31, 2020, as filed with the SEC. Factors that
could cause actual results to differ from those described above are
set forth in the risk factors discussed below and those contained
in the section entitled “Risk Factors” contained in our Annual
Report on Form 20-F for the year ended December 31, 2019.
The comparative figures for the three months
ended June 30, 2019 have been derived from our unaudited quarterly
financial results as previously reported.
Yandex N.V.
Preliminary Consolidated Results
(Rub in millions) |
Three Months Ending |
|
June 30, 2020 (Estimated) |
June 30, 2019 (Actual) |
|
Low |
High |
|
Consolidated Revenues |
40,600 |
|
41,800 |
|
41,397 |
Consolidated Net Income
(loss) |
(4,500 |
) |
(3,000 |
) |
3,416 |
Consolidated Adjusted EBITDA |
7,500 |
|
8,000 |
|
13,097 |
Consolidated Adjusted Net
Income |
1,300 |
|
2,500 |
|
5,825 |
For the three months ending June 30, 2020, we
estimate our consolidated revenue to be in the range of RUB 40.6
billion to RUB 41.8 billion, as compared to RUB 41.4 billion for
the three months ended June 30, 2019, representing a year-over-year
decrease at the midpoint of 0.5%. The estimated decrease in
our consolidated revenue compared to the same period during 2019 is
primarily the result of the adverse impact of the COVID-related
restrictions of business activity on the performance of our core
advertising and ride-hailing businesses, which was partially offset
by an acceleration of growth in our FoodTech and Media Services
businesses.
For the three months ending June 30, 2020, our
consolidated adjusted EBITDA is expected to be between RUB 7.5
billion and RUB 8.0 billion, a decrease of 40.8% at the midpoint
range as compared to RUB 13.1 billion for the three months ended
June 30, 2019. The estimated decrease in adjusted EBITDA compared
to the same period of 2019 is primarily driven by the slowdown in
revenue growth and changes in segment mix amid the growing
contribution of non-advertising verticals and the continuing
investments in our growing new businesses, including Yandex.Lavka,
our self-driving group and Media Services.
For the three months ending June 30, 2020, we
estimate our consolidated net income (loss) to be in the range of
(RUB 4.5 billion) to (RUB 3.0 billion), as compared to RUB 3.4
billion for the three months ended June 30, 2019. Thе estimated
decrease is primarily the result of the estimated decline in
operating income (including growth in share-based compensation) and
foreign exchange losses.
For the three months ending June 30, 2020, we
estimate our consolidated adjusted net income to be in the range of
RUB 1.3 billion to RUB 2.5 billion, as compared to RUB 5.8 billion
for the three months ended June 30, 2019. The estimated decrease is
primarily the result of the estimated decline in adjusted EBITDA
for the period.
Adjusted EBITDA and adjusted net income are not
financial measures calculated under U.S. generally accepted
accounting principles (“GAAP”). See the tables below for a
reconciliation of such non-GAAP financial measures to the most
directly comparable GAAP measures.
Search and Portal
Segment Preliminary Financial Results
(Rub in millions) |
Three Months Ending |
|
June 30, 2020 (Estimated) |
June 30, 2019 (Actual) |
|
Low |
High |
|
Revenue |
25,000 |
26,000 |
29,090 |
Revenue Ex-TAC |
20,000 |
21,000 |
22,796 |
Adjusted EBITDA |
10,200 |
11,300 |
13,747 |
For the three months ending June 30, 2020,
revenue for our Search and Portal segment is expected to be in the
range of RUB 25.0 billion to RUB 26.0 billion as compared to RUB
29.1 billion for the three months ended June 30, 2019. The revenue,
less total traffic acquisition costs (“TAC”), for our Search and
Portal segment for the three months ending June 30, 2020, is
expected to be in the range of RUB 20.0 billion to RUB 21.0
billion, as compared to RUB 22.8 billion for the three months ended
June 30, 2019, representing a year-over-year decrease of 10.1% at
the midpoint. The estimated decrease in both revenue and revenue
excluding TAC compared to the same period in 2019 is primarily the
result of the adverse impact of COVID-related restrictions on
business activity and our customers’ advertising budgets.
For the three months ending June 30, 2020,
adjusted EBITDA for our Search and Portal segment is expected to be
between RUB 10.2 billion and RUB 11.3 billion, an estimated
decrease of 21.8% at the midpoint as compared to RUB 13.8 billion
for the three months ended June 30, 2019. The estimated decrease in
adjusted EBITDA compared to the same period in 2019 is primarily
driven by the decline in the Search and Portal revenue.
See below for a reconciliation of Revenue Ex-TAC
of our Search and Portal segment to the most directly comparable
measures calculated in accordance with GAAP, Revenue.
Taxi Segment
Preliminary Financial Results
(Rub in millions) |
Three Months Ending |
|
June 30, 2020 (Estimated) |
June 30, 2019 (Actual) |
|
Low |
High |
|
Revenue |
11,900 |
|
12,300 |
8,810 |
Adjusted EBITDA |
(500 |
) |
0 |
423 |
For the three months ending June 30, 2020,
revenue for our Taxi segment is expected to be in the range of RUB
11.9 billion to RUB 12.3 billion as compared to RUB 8.8 billion for
the three months ended June 30, 2019, representing a year-over-year
increase at the midpoint of 37.3%. The estimated increase in
revenue compared to the same period during 2019 is primarily driven
by the acceleration in revenue of our FoodTech businesses
(including Yandex.Lavka revenues, which are recorded gross) and
Taxi and logistics services to our corporate clients, which are
also recorded on a gross basis, which offset the COVID-related
slowdown in ride-hailing revenues.
For the three months ending June 30, 2020,
adjusted EBITDA for our Taxi segment is expected to be between a
RUB 0.5 billion loss and break-even as compared to RUB 0.4 billion
for the three months ended June 30, 2019. The estimated decrease in
adjusted EBITDA compared to the same period of 2019 is primarily
driven by investments in the expansion of Yandex.Lavka and our
self-driving group. Adjusted EBITDA loss of our self-driving group
is expected to be between RUB 0.7 billion and 0.75 billion for the
three months ending June 30, 2020.
Reconciliation of Non-GAAP Financial
Measures
Reconciliation of
Consolidated Adjusted EBITDA to U.S. GAAP Net Income
(Rub in millions) |
Three Months Ending |
|
June 30, 2020 (Estimated) |
June 30, 2019 (Actual) |
|
Low |
High |
|
Net income |
(4,500 |
) |
(3,000 |
) |
3,416 |
|
Add: depreciation and amortization |
4,085 |
|
4,085 |
|
3,756 |
|
Add: share-based compensation expense |
4,492 |
|
4,292 |
|
2,347 |
|
Add: compensation expense related to contingent consideration |
0 |
|
0 |
|
7 |
|
Add: one-off COVID-19 expenses(1) |
227 |
|
227 |
|
0 |
|
Less: interest income |
(472 |
) |
(572 |
) |
(834 |
) |
Add: interest expense |
0 |
|
0 |
|
12 |
|
Add: loss from equity method investments |
984 |
|
946 |
|
946 |
|
Add: other loss/(income), net |
699 |
|
699 |
|
414 |
|
Add: income tax expense |
1,985 |
|
1,323 |
|
3,033 |
|
Adjusted EBITDA |
7,500 |
|
8,000 |
|
13,097 |
|
(1) Consists primarily of costs of our Helping Hand project, our
COVID-related support fund for drivers and couriers, and costs for
masks and sanitizers.
Reconciliation of
Consolidated Adjusted Net Income to U.S. GAAP Net Income
(Rub in millions) |
Three Months Ending |
|
June 30, 2020 (Estimated) |
June 30, 2019 (Actual) |
|
Low |
High |
|
Net income |
(4,500 |
) |
(3,000 |
) |
3,416 |
|
Add: share-based compensation expense |
4,492 |
|
4,292 |
|
2,347 |
|
Less: reduction in income tax attributable to share-based
compensation expense |
(46 |
) |
(44 |
) |
(21 |
) |
Add: compensation expense related to contingent consideration |
0 |
|
0 |
|
7 |
|
Add: foreign exchange losses/(gains) |
1,105 |
|
976 |
|
270 |
|
Less: (reduction)/increase in income tax attributable to foreign
exchange losses/(gains) |
(229 |
) |
(202 |
) |
(73 |
) |
Add: one-off COVID-19 expenses(2) |
227 |
|
227 |
|
0 |
|
Add: amortization of debt discount |
335 |
|
335 |
|
0 |
|
Less: reduction in income tax attributable to amortization of debt
discount |
(83 |
) |
(83 |
) |
0 |
|
Less: effect of deconsolidation of former subsidiaries |
0 |
|
0 |
|
(121 |
) |
Adjusted net income |
1,300 |
|
2,500 |
|
5,825 |
|
(2) Consists primarily of costs of our Helping Hand project, our
COVID-related support fund for drivers and couriers, and costs for
masks and sanitizers.
Reconciliation of
Segment Non-GAAP Measures
Search and Portal
(Rub in millions) |
Three Months Ending |
|
June 30, 2020 (Estimated) |
June 30, 2019 (Actual) |
|
Low |
High |
|
Total revenue |
25,000 |
|
26,000 |
|
29,090 |
|
Less: traffic acquisition costs (TAC) |
(5,000 |
) |
(5,000 |
) |
(6,294 |
) |
Ex-TAC revenues |
20,000 |
|
21,000 |
|
22,796 |
|
Segment Adjusted EBITDA
Information reconciling adjusted EBITDA for our
Search and Portal segment and our Taxi segment to the most directly
comparable GAAP financial measure is unavailable to us without
unreasonable effort. We have not provided a reconciliation of
adjusted EBITDA for our Search and Portal segment and our Taxi
segment to the most directly comparable GAAP financial measure
because of the uncertainty regarding, and the potential variability
of, many of the costs and expenses that we may incur in the future.
Although we provide a range of adjusted EBITDA that we believe will
be achieved for our Search and Portal and Taxi segments, we cannot
accurately predict all the components of the adjusted EBITDA
calculation.
Yandex NV (NASDAQ:YNDX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Yandex NV (NASDAQ:YNDX)
Historical Stock Chart
From Apr 2023 to Apr 2024