AGM 2021

Jun 28, 2021

Good morning, shareholders. I would like to welcome you to our virtual Class A Shareholders Meeting as well as our Annual General Meeting of My name is John Boynton, and I'm the Chairman of the Board of Directors of Yandex NV. In accordance with the company's articles of association, I will share today's shareholder meetings. I'm pleased to introduce the company's Chief Executive Officer and member of the company's Board of Directors, Mr. Arkady Volusch Deputy CEO and Member of the Board, Tigran Hudavergyan Member of the Company's Board, Mr. Rahir Rinya the company's Chief Operating Officer, Mr. Vadim Marcuk the company's Chief Financial Officer, Ms. Svetlana Demishkevich and IR Director, Ms. Yulia Gerasimov, who are participating in our meetings today. In accordance with the company's articles of association, I will appoint the company's secretary, Ms. Maria Klimashevskaya, to keep minutes of today's meetings. Today's meetings have been called in accordance with the articles of association of the company and Dutch law. On the 10th June 2021, a notice of the meeting of Class A holders and a notice of the Annual General Meeting with agendas and explanatory notes were made public and sent to all registered shareholders of the company. The explanatory notes to the merger proposal, which is subject to the approval of the Class A holders and the company's 2020 statutory annual accounts, have been made available for inspection by shareholders. As we mentioned in the notice, shareholders will not be able to vote in real time at the webcast meetings. Instead, shareholders were requested to vote in advance. Let's start with the Class A meeting. According to the available information, holders of approximately 76% of our Class A shares have voted by proxy prior to the Class A meeting. Thus, I can state that the quorum for making decisions on the agenda items has been reached and the decisions made are valid. Let me please remind you that the only item submitted to the approval by the Class A shareholders is a prior approval of the proposed resolution of the Board of Directors to resolve upon the legal merger of the company, the acquiring company with Yandex. Market BV, the Disappearing Company. The merger proposal and explanatory notes have been made available to merger is as follows. In July 2020, Yandex. NV acquired a significant minority interest in Yandex. Market. BV from Sberbank of Russia. Yandex. Market. BV is currently a wholly owned subsidiary of Yandex. MV and is the intermediate holding company of the core e commerce business of the Yandex Group. Following the transaction with Fairbank, the separate intermediate holding company structure serves no corporate purpose. In addition, this separate intermediate holding company creates tax and operational inefficiencies across the Yandex Group as a whole. Accordingly, the Board of Directors of Yandex has determined that it is advisable and in the best interest of Yandex and its shareholders to merge Yandex. Market BV with and into Yandex. NV with the separate corporate existence of Yandex Market BV ceasing. This internal restructuring is not expected to have any impact on the overall operations of Yandex Group other than these corporate and tax efficiencies. Under Dutch law, the merger may be resolved upon by the Board of Directors of the company. Pursuant to the articles and association of the company, the proposed resolution of the Board of Directors requires the approval prior approval of the Class A meeting. Accordingly, to simplify the legal structure of the Yandex Group and thereby reduce the costs relating to the separate accounting and operational systems within the Andex Group, it is proposed to affect the merger and that the Class A meeting grants the prior approval. As shareholders provided their votes in advance and we have the results of voting, I can conclude that the proposed decision has been adopted with requisite majority. According to the rules of the virtual meetings of shareholders, we offered our shareholders the opportunity to ask questions in advance of the meeting. We have not received any specific questions with respect to the meeting of Class A holders before the meeting or during our webcast. Therefore, the Class A meeting is hereby adjourned, and I suggest that we move to the agenda of the Annual General Meeting. According to the available information, holders of approximately 76% of our Class A shares and 99% of our Class B shares have voted by proxy prior to the AGM. Before we move to the agenda and the results of voting, we would like to briefly update our shareholders on the results for the Q1 of 2021. Given that it is late June 2021, it seems too late to talk about the results of 2020. And as you know, the company has already announced its financial results for fiscal year 2020 and the Q1. We would like to make a short presentation for those who did not attend the company's investor call held on April 28, 2021. I'd like to give the floor to Vadim Marczuk. Thank you, John, and good afternoon to all of our shareholders. Let me give you an overview of our operational and financial performance. Before moving to the most recent results, I wanted to highlight 2 items. 1st, it is how diversified our business has become. In Q1 of this year, non advertising segments accounted for over half of our total group revenues for the first time in Yandex history. 5 years ago, over 90% of our revenues came from search and portal only. Secondly, Search and Portal is no longer the only significant business segment generating cash flows for our platform. Ridesharing generates solid margins and is now the 2nd largest business within the group with a very sizable contribution to the group adjusted EBITDA, which helps us to fund our initiatives in FoodTech and Logistics. Turning to our performance. We are very encouraged by having started the year with a solid recovery in our advertising and the ride hailing businesses, as well as continued strong momentum in other verticals such as media services, food delivery and logistics. Our course business segment, Search and Portal, has continued to grow well and ahead of our expectations in Q1. We have even upgraded the full year guidance for search and portal revenue from mid teens to high teens growth. Our search share also shows solid trends. In March 2021, we reached a record 59.4% share on Android, while our total share came to 60%. In this business, we continue to make targeted investments into ad technologies, improving monetization and our search share on iOS devices to support our ad revenue growth while sustaining our high margins. The Taxi Group is also doing well. We saw a solid recovery in our ride hailing business along with further acceleration in food delivery growth rates. Our e grocery business, Lavka, and new logistics services demonstrated significant sequential growth in Q1 of this year. The trends on the profitability side were also strong with adjusted EBITDA of the Taxi Group significantly higher in Q1 versus Q4 levels. This came as a result of the margin improvement in the ride hailing business, which was supported by efficiency improvements as well as solid growth in GMV in Q1, which has absorbed increased investments in food, tech and logistics. Furthermore, we also made significant progress in executing against our strategic roadmap in e commerce. Total e commerce GMV, which consists of Yandex. Market marketplace, Lavka and grocery related GMV of Yandex. Eats grew almost 190% year over year in Q1. Yandex. Market GMV on a standalone basis has also accelerated versus Q4 of last year on the back of the following 5 factors. 1st, a significant expansion in assortment of the logistics infrastructure. Concentrated investments into improved price positioning across SKU categories, conversion of merchants from price comparison to marketplace, support from our Yandex. Plus program as well as improving the product for our consumers and merchants. We are confident in our ability to deliver on our full year guidance to increase total e commerce GMV by 2.5x. Let me give you an update on another important initiative, which is Yandex. Plus. The total number of subscribers kept growing above 100% year over year and reached around 9,000,000 subscribers. Yandex. Plus members form a loyal customer base who spend more and transact more often in our services when compared to our non plus customers. Trends in other businesses are also solid. Media Services continues its rapid growth, reflecting increasing demand for our services and a growing number of Yandex. Plus subscribers. Other businesses like cloud, devices, education, all recorded triple digit growth rates in Q1 2021. And in conclusion, we would like to say that we see solid momentum across our key verticals, which gives us the confidence to continue to prioritize growth and to invest prudently into new attractive opportunities, which will benefit Yandex in the long run. Okay, Vadim, thank you very much for the presentation. Now I suggest that we move into our agenda items. The agenda of today's AGM contains 10 items and those shareholders who joined our webcast today may see them on the slide on our Shareholder Experience website. All these items are routine items for our AGMs. Among them, number 1, approval of the 2020 annual statutory accounts of the company 2, discharge of the members of the Board of Directors for their liability towards the company for their management during the 2020 financial year 3, reappointment of John Boynton as a non executive member of the Board of Directors for a 4 year term 4, reappointment of Esther Dyson as a non executive member of the Board of Directors for a 4 year term 5, reappointment of Elias Trebulayev as a non executive member of the Board of Directors for a 4 year term 6, appointment of Alexander Moldovan as a non executive member of the Board of Directors for a 4 year term 7, appointment of the external auditor of the company for the 2021 financial year. 8, general authorization of the Board of Directors to issue Class A shares 9, general authorization of the Board of Directors to exclude preemption rights and finally 10, general authorization of the Board of Directors to acquire shares in the company. As shareholders provided their votes in advance and we have the results of the voting, I can conclude that all proposed decisions have been adopted with the requisite majorities. The company will report the exact results of the voting in due course. At the same time, I would like to note the relatively lower level of public shareholder support for agenda item number 9, the general authorization of the Board to exclude preemption rights. And to tell you that the Board will consider the concerns of shareholders in this regard going forward. I'd like to emphasize that the Board has no current plans to issue new shares, but does believe it is important to maintain flexibility to respond quickly to market conditions and business developments and believes that limiting the ability to issue shares to rights offerings, which entails significantly greater complexity and time, would not be in the best interest of the company and all of its stakeholders. The Board also notes that many of the company's peers are incorporated in Delaware or other U. S. States and do not provide for statutory preemptive rights. And so believes that the company's approach in this regard is in line with that of its international competitors. I would also like that you, Gerasimov here, Head of Investor Relations, that we note the comments of some shareholders about the length of service of John Boysen and Esther Dyson and their independence. And we want to assure shareholders that we comply with the NASDAQ requirements for the director independence, which do not consider the length of the service on the Board as precluding a determination of independence. NASDAQ also rules that the Board as a whole make an affirmative determination of the independence of our independent directors. And the Board has made that determination with respect to John and Esther. Finally, I want to emphasize that the Board believes that the company and the Board as a whole continue to benefit from John and Esther's service, particularly in the light of the growing complexity of Randex business and the vertical environment in which we operate. That being said, we understand that our shareholders may follow their own policies with regard to the independence criteria, which will be considered by the Board. Thank you, Yuliya. And now we are ready to answer your questions, if any. According to the rules of the virtual general meeting of shareholders, we offered our shareholders the opportunity to ask questions in advance of the AGM. However, we have not received any questions as of June 26 and have not received any follow-up questions during this meeting. However, if we have any other questions from shareholders received at this moment, we are ready to address them during our Q and A session, which will be handled by Yuliya. Okay. I take it we have no questions? No questions, John. Okay. Thank you, Leah. In that case, I'd like to thank everybody for voting and joining our virtual AGM and the meeting is hereby adjourned.