HeadHunter Group PLC (NASDAQ:HHR) Q2 2020 Earnings Conference Call - Final Transcript
Aug 27, 2020 • 09:00 am ET
question about the marketing that you guys were talking about. You talked about the increase that you put through to the marketing budget in June. I guess, I was just curious what that looks like over the course of the rest of the year. With the competitive dynamic that you're seeing, the rebound in activity, how much of an increase in marketing should we be expecting in the second half of the year?
Yeah. Thanks, Roman. This is Grigorii. I think, as you saw, we had a 6% increase in marketing in Q2, right? That's kind of not very dramatic, frankly. But in terms of [Technical Issues] that's correct that June was very kind of intensive month. I think it accounted for slightly kind of half of the quarterly budgets. In terms of the second half of the year, I guess, we are looking at more or less kind of the same level of market in ruble terms. as we had the year before in the second half, maybe kind of slightly more than that depending on the development of the competitive situation or any opportunities we may see in terms of additional investment. Currently, I guess, no plans to kind of significantly material increase the level compared to the last year.
So it sounds like marketing expense will not be a headwind to margins in the second half of the year, the way they were in Q2, right? Because I guess my impression from earlier the comments that you made over the course of the second quarter was that there will be a bigger increase to marketing spend...
[Speech Overlap] opportunity to take market share that you talked about. It doesn't sound like it's coming through to the extent that you had expected?
Yeah. Yeah. Hopefully, they won't. Just -- the problem here is that it will largely depend on revenue development, right? So probably, as we -- as Dima said, we do have now is high-single-digit growth in our revenues. While the risk kind of continues until the end of the year, I would say the marketing in the second half of the year would be kind of on the same level as the year before as a percentage of revenue, right? At the same time, for the full year, I guess -- again, taking this scenario in account about revenues, I guess for the full year, marketing can be slightly higher as a percentage of revenue and can have -- so we can get some pressure on margins from marketing for the full year, just on the back of the low revenue in the Q2.
Do you think going forward the competitive environment is such that marketing will continue to increase as a percentage of sales in future years as well? Or is the increase this year going to be a one-off?
I think, firstly, we frankly do not have an increase attributed to competitive environment, right? It's just an increase as kind of percentage