August 23, 2022 – Ozon Holdings PLC (NASDAQ and MOEX: “OZON”, thereafter referred to
as “we”, “us”, “our”, “Ozon” or the “Company”), an operator of the leading Russian e-commerce
platform, announces its unaudited financial results for the second quarter ended June 30,
2022.
Second Quarter 2022 Operating and Financial Highlights
- GMV incl. services reached RUB 170.6 billion in Q2 2022 compared to RUB 89.0 billion in Q2 2021, with a 92% year-on-year increase due to strong order growth.
- Number of orders increased by 121% year-on-year to 90.2 million orders delivered in Q2 2022, compared to 40.9 million orders in Q2 2021, which was primarily driven by the customer base expansion and rising order frequency.
- Number of active buyers climbed to 30.7 million in Q2 2022, compared to 18.4 million in Q2 2021, growing by 67% year-on-year. Order frequency grew by 64% year-on-year reaching 10.8 orders per annum as of June 30, 2022, compared to 6.6 as of June 30, 2021.
- Number of active sellers tripled year-on-year, exceeding 150,000 as of June 30, 2022, compared to nearly 50,000 active merchants as of June 30, 2021 due to a combination of a rapidly growing customer base and our extensive suite of services, including fulfillment and logistics, advertising and financial services.
- Share of Marketplace reached 76.1% as a percentage of GMV incl. services compared to 62.1% in Q2 2021 due to significant seller base growth.
- Total revenue grew by 58% year-on-year to RUB 58.5 billion in Q2 2022 compared to RUB 37.0 billion in Q2 2021, as revenues from services increased by 185% year-onyear and surpassed revenues from direct sales of goods for the first time driven by rapid growth in marketplace commissions, advertising and other revenues in Q2 2022.
- Operating loss as a percentage of GMV incl. services, demonstrated significant improvement year-on-year, as a result of benefits of scale and operating leverage, and a higher contribution from additional services such as advertising. Our concerted efforts around cost optimization and enhanced focus on increasing efficiency of operations was reflected in decreasing operating expenses as a percentage of GMV incl. services.
- Adjusted EBITDA improved to RUB 0.2 billion corresponding to 0.1% as percentage of GMV incl. services in Q2 2022, compared to negative RUB 9.1 billion and negative 10.3% respectively in Q2 2021. Achieving positive adjusted EBITDA represents an important milestone for the Company and demonstrates strong execution and our commitment to improve unit economics whilst maintaining robust growth.
- Net cash used in operating activities was RUB 5.4 billion in Q2 2022, compared to RUB 7.7 billion used in operating activities in Q2 2021, with the year-on-year improvement driven by a reduction in operating loss, partially offset by working capital outflows.
- Cash, cash equivalents and short-term deposits amounted to RUB 56.7 billion (an equivalent of 1.1 billion in USD terms1) as of June 30, 2022, compared to RUB 92.5 billion (an equivalent of 1.1 billion in USD terms1) as of March 31, 2022. The decline in our reported cash balance is mainly attributable to the foreign exchange loss as a result of Russian Ruble appreciation as well as cash outflow for operating and investing activities.
Summary: Key Operating and Financial Metrics
The following table sets forth a summary of the key operating and financial information for the
three and six months ended June 30, 2022 and 2021, which has not been audited by the
Company’s auditors.
Note that Contribution Profit / (Loss), Adjusted EBITDA and Free cash flow are non-IFRS
financial measures. See “Presentation of Financial and Other Information” section of this press
release for a definition of such non-IFRS measures, a discussion of the limitations on their use,
and reconciliations of the non-IFRS measures to the applicable IFRS measures. See the
definitions of metrics such as GMV incl. services, Gross Profit, number of orders, number of
active buyers, number of active sellers and share of Marketplace GMV in the “Other Key
Operating Measures” section of this press release.
Key Business Developments
Ozon Marketplace
Our marketplace platform continues to demonstrate solid operating results. We see strong
network effect and believe that our value proposition resonates well with our existing buyers
and sellers and it continues to attract new customers and merchants to our platform.
Sellers
We provide sellers with access to millions of customers, extensive logistics capabilities and
last mile network in Russia, Belarus and Kazakhstan. We also offer services aimed at
increasing merchants’ efficiency and helping them to scale their businesses faster, such
as fintech solutions, advertising, and market analytics tools.
- Ozon continues to develop new unique solutions to support sellers. A “virtual distribution center”, launched in June 2022, is already allowing more than 25,000 sellers to increase sales and to control delivery and storage costs more effectively in the regions outside of the metropolitan areas. Big data tools and artificial intelligence assist merchants in forecasting demand and sales across their regions of presence. The tool enables them to allocate goods within our warehouse infrastructure across all clusters, bringing more goods closer to our regional customers and expediting delivery.
- Ozon demonstrated solid progress in monetizing its advertising platform: more than half of our seller base actively uses our advertising instruments which enable merchants to boost sales, to promote their products in our application and to analyze their consumer profile.
Our high-quality services, user experience and wide assortment augment growth in the
number of active users and strengthen customer loyalty which is one of our key priorities.
The number of active buyers increased by 67% year-on-year to 30.7 million and annual
order frequency increased by 64% year-on-year reaching 10.8 orders in Q2 2022.
Assortment
A significant seller base expansion resulted in our product assortment increasing by
approximately 5x year-on-year, exceeding 130 million SKUs as of June 30, 2022,
compared to 27 million SKUs as of June 30, 2021. The number of SKUs in the Apparel
category grew by 5.3x compared to Q2 2021, exceeding 34.0 million as of June 30, 2022.
In Q2 2022, we continued to develop our own private label which included c.400 SKUs in
both food and non-food categories as of June 30, 2022. In 2022, Ozon launched a clothing
brand Hola and a TV brand Hartens. The Company plans to further expand the private
label
assortment to be exclusively sold on our marketplace and to motivate sellers to
produce such goods for Ozon.
Other Verticals
- Ozon Financial Services continues to develop its B2B and B2C services to improve user engagement and customers’ loyalty with a focus on efficiency and product economics. This is underpinned by an efficient fintech infrastructure. More than 5.7 million active buyers were using Ozon.Account or Ozon.Card for purchases on our platform as of June 30, 2022.
- Ozon Express was rebranded in March 2022 to Ozon fresh. It delivers fresh food and daily groceries, including products from the Russian local farmers. Since June 2022 Ozon fresh started to attract more third-party sellers to extend the assortment range across various categories, e.g. Children’s goods. This enables our customers to take advantage of a faster delivery for a greater number of SKUs. Furthermore, Ozon fresh continues to develop its own private label with 224 SKUs in food and non-food categories in Q2 2022.
- Ozon continued to develop in Belarus and Kazakhstan, launching its own logistics and delivery channels, pick-up point franchising solutions and sorting facilities. Ozon’s international expansion enables us to explore opportunities in underpenetrated ecommerce markets in the CIS region and to expand our total addressable market as well as customer and seller base.
- Cross-border operations enable us to increase our assortment through unique goods and provide substitutes for brands. Ozon Global enrolled c.12,000 merchants from various countries, in particular from Turkey and China, to boost cross-border offerings to our customers.
The following table sets forth financial information for the three and six months ended June 30,
2022 and 2021, which has not been audited by the Company’s auditors. The unaudited interim
financial information includes all normal recurring adjustments that we consider necessary for
a fair statement of the information shown.
Revenue
Total revenue increased to RUB 58.5 billion in Q2
2022 with growth of 58% year-on-year from RUB 37.0 billion in Q2 2021. Growth
was mostly driven by an increase in service revenue of 185% year-on-year due to
increasing scale of the business and seller base expansion. This marks the first
quarter when our service revenue exceeded revenue from the sales of goods, as a
result of greater variety of services provided to a wider seller base.
Sales of goods
Sales of goods grew by 7% year-on-year to RUB 28.3
billion in Q2 2022 from RUB 26.4 billion in Q2 2021 due to the slower growth of
Direct Sales (1P) and an increased emphasis on service revenues.
Service revenue
Service revenue reached
RUB 30.3 billion in Q2 2022, growing by 185% year-on-year from RUB 10.6
billion in Q2 2021, as a result of marketplace commissions and advertising revenue increasing
by 179% and 220% year-on-year respectively. Service revenue has continued to increase year-on-year
for four consecutive quarters supported by a growing merchant base with order growth more than doubling year-on-year.
Marketplace commissions
Marketplace
commissions grew by 179% year-on-year to RUB 23.3 billion in Q2 2022, compared
to RUB 8.3 billion in Q2 2021, driven by strong order growth, increasing number
of sellers and services provided to merchants. Our blended take rate increased to
17.9% in Q2 2022 compared to 15.1% in Q2 2021.
Advertising revenue
Advertising revenue increased
by 220% year-on-year to RUB 4.8 billion in Q2 2022, compared to RUB 1.5 billion
in Q2 2021 boosted by a wider range of advertising tools offered by the Company
and a greater number of sellers adopting our advertising services.
Cost of sales
Cost of sales remained broadly flat compared to Q2 2021, growing by 1%
year-on-year in Q2 2022, largely due to slower growth in Direct Sales (1P).
Gross Profit
Gross profit amounted to RUB 33.2 billion,
growing by 180% year-on-year in Q2 2022, compared to RUB 11.9 billion in Q2
2021. Gross profit as a percentage of GMV incl. services increased by 6.1 p.p. to
19.5% in Q2 2022, compared to 13.4% in Q2 2021, mainly as a result of growing contribution
from service revenue.
Contribution Profit / (Loss)
Contribution profit reached RUB 9.0 billion in Q2 2022, compared to a loss
of RUB 2.3 billion in Q2 2021, due to growth in gross profit outpacing
increases in the fulfillment and delivery expenses as a result of economies of
scale and our cost optimization initiatives.
Operating expenses
Operating expenses rose by 35% year-on-year in Q2 2022, compared to Q2 2021,
primarily driven by greater volume of orders, as well as investments in IT, product
and talent acquisition. Operating expenses as a percentage of GMV incl.
services amounted to 39.0% in Q2 2022, which represents a 16.5 p.p. improvement
compared to 55.5% in Q2 2021, reflecting our focus on execution, cost
optimization and efficiency.