renaissance capital 16th annual 1:1 investor conference...

Renaissance Capital 16th Annual 1:1 Investor Conference Search

June 25, 2012

2

Forward Looking Statement Disclaimer

This presentation contains forward-looking statements that involve risks and uncertainties. These include statements regarding the anticipated development of the internet search and the online advertising markets, the planned growth of our business and our anticipated revenues and capital expenditures.

Actual results may differ materially from the results predicted or implied by such statements, and our reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted or implied by such statements include, among others, competitive pressures, our ability to attract and retain users, advertisers and partners, changes in advertising patterns, changes in internet usage patterns, changes in the legal and regulatory environment, 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” and “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F dated March 2, 2012, which is on file with the Securities and Exchange Commission and is available on our investor relations website.

All information provided in this presentation is as of June 25, 2012, and Yandex expressly disclaims any duty to update this information unless required by law.

3

Introduction

We Are the Market Leader

#1 Internet Destination

47 million unique visitors per month2

44% of Russian users’ homepages3

Search Leader

60.5% search market share in Russia1

Leading Online Advertising Platform

179,000+ advertisers in Q1 20124

51% online ad market share5

Largest Russian Internet Business

Q1 2012$200m Revenues6 (51% yoy growth)

$81m Adj. EBITDA7 (38% yoy growth)

1 Source: Liveinternet, May 20122 Source: comScore, April 20123 Source: TNS, January 20114 Source: Company Information, Q1 2012

5 Source: AKAR 2011, as of Feb 21, 2012, adjusted for commissions6 Source: Company Information for Q1 2012, using an exchange rate of RUR 29.3282 to $1.00 as of Mar 31, 20127 Source: Company Information for Q1 2012, using an exchange rate of RUR 29.3282 to $1.00 as of Mar 31, 2011Adjusted EBITDA is EBITDA before share-based compensation. See slides 21-23 for reconciliation to US GAAP Net income

4

Source: LiveInternet.ru, May 2012

Consistent Market Leadership

Search traffic reflects Russian users to Russian websites

May

-06

Jul-0

6

Sep

-06

Nov

-06

Jan-

07

Mar

-07

May

-07

Jul-0

7

Sep

-07

Nov

-07

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

May

-12

26.2%

8.2%

1.4%

6%

6%

21%

60.5%61%

65%

54%

5

Our Mission: To Answer Any Question Internet Users May HaveYandex at a Glance

News

Traffic jams/mapsWeather

Yandex.Money

Auto Comparison Shopping

Photo SharingBlog search

TV Guide

Playbill

Mail

Maps

Search Mobile

Personalservices

AppsMobilewebsites

Mail

Onlinepayments

Ad network

Verticals

Market

Auto & realty

Jobs

Machine learning in ad network Social demographic targeting New multimedia formats

Social authorization E-mail translation

Search app for iPhone Yandex.Taxi App Search

Reykjavik, Localized

search autocomplete

People search Twitter

partnership Country-wide route

planner Public transport

Partnerships with MS, Samsung, Nokia, HTC

Default search on WindowsPhone 7 & bada in Russia

Acquisition of SPB Software

Mobile wallet & apps

Integration with social networks

Integration with bank cards

Expansion into CIS

3D images User credentials

Yandex is Search and Much More

6

7

60-70% share 20-30% share 2-5% share

US Google Bing AOL, Ask, Blekko

Russia Yandex Google Mail, Rambler, Nigma, Aport

China Baidu Google Bing, Sina, …

Korea Naver Daum Google, …

Czech Seznam Google

Japan Yahoo.co.jp/Google Google Baidu, Bing, …

International Search Markets

There are Multiple Competitive Search Markets…

… but Many Other Markets Exist with no Competition in Search

Turkey Google >95% Yandex

70%+ share 20-30% share 2-5% share

8

Turkey – Our First International Market

Population of 76MM Internet users (‘11): 35MM (46%) 2B local webpages Online ad market (‘13E): $300MM

- Online ad penetration: 8% No established #2 player in search

1 Euromonitor; FOM; Global Insight; InternetWorldStats.com; ZenithOptimedia; Advertising Expenditure Forecasts, December 2011; Internet user penetration based on total population (source: Global Insight)2 comScore, March 2012

Turkey at a Glance1 Yandex in Turkey

>4.0MM users in March 20122

400K daily users of the portal 2

Exclusive content on Yandex.Maps

Maps and Map Based ServicesTurkish Market: Fast Growing and Sizeable

News

Image search

Video searchSearch for

goods

Mail

Weather

Widgets

Expected to be among leading EMEA markets in terms of Ad Expenditure growth in 2011-20141

Key FactsAmong the professors are founders of mathematical theory

underlying modern search

Yandex School of Data AnalysisEstablished to revive the environment that may nurture new talents for Yandex and for the industry

Two-year master program

Three core directions: data analysis, computer science and bioinformatics

Series of full-time evening classes taught by professors of national and foreign universities

Partners with the leading Russian universities

2,384 3,825 3,759

6,164

9,237

1,719 2,377

2007 2008 2009 2010 2011 Q1 2011 Q1 2012

4,249

7,649 8,729

12,500

20,033

3,894 5,874

2007 2008 2009 2010 2011 Q1 2011 Q1 2012

10

Financial Summary

Revenues 1 (RUR MM) Adjusted EBITDA 2 (RUR MM)

Adjusted Net Income 2 (RUR MM)

Financial Review

Capex (RUR MM)

1. Revenues are recognized net of VAT, discounts and commissions, but gross of TAC2. Adjusted EBITDA, Adjusted Net Income, Adjusted EBITDA margin and Adjusted Net Income margin are non-GAAP financial measures. For Reconciliations of non-GAAP financial measures to the nearestcomparable US GAAP measures see slides 21-23.3. Translated using an exchange rate of RUR32.1961 to $1.00. $ figures shown in charts expressed in millions

x% Capex/Gross Revenue

$622 3 $287 3

1,561

2,523 2,270

3,968

6,003

1,093 1,505

2007 2008 2009 2010 2011 Q1 2011 Q1 2012

$187 3

832

1,337 987

2,199

5,562

978

767

2007 2008 2009 2010 2011 Q1 2011 Q1 2012

$173 3

20% 17% 11% 18% 28% 25% 13%

65%62%

66%

76%

76%

77%73%

24%20%

12%

12%

17%16%

12%11%

10%

10%

8%

7%

2%3%

2%

3%4,249

7,6498,729

12,500

20,033

3,894

5,874

2007 2008 2009 2010 2011 Q1 2011 Q1 2012

Text-based Yandex Ad Network Display Yandex.Money and Other Total revenue

2%

12%

11

Revenues

Revenues 1 (RUR MM) and Contribution by Source (%)

Financial Review

1. Revenues are recognized net of VAT, discounts and commissions, but gross of TAC

Items may not total 100% due to rounding

12

Key Investment Highlights

Operational Metrics

GROWTH IN PAID CLICKS AND CPC, %

92%

76%69%

60%

39%

28% 29%34%

22%

19% 17% 21%

51%47%

68% 65%61%

18% 17% 16%

-3%

-15% -13%-18%

-7%

13%

20%24% 26%

7% 8%

-1%-7% -5%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12

Clicks Y/Y Growth CPC Y/Y Growth

13


Traffic Acquisition Costs

TAC BREAKDOWN1, MM RUR

1 Items may not total due to rounding

5% 5% 5% 6% 6% 6%6% 5% 6%9%

7%7%

7%8%

8%

10%

10%11%

317 353 396

507 537

641

818

1,002 99213%

12% 13% 12%

14% 14%

16% 16%

17%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

200

400

600

800

1000

1200

1400

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12

Distribution TAC Partner TAC TAC as % Revenue

14


Traffic Acquisition Costs

Partner TAC as % of Partner Revenue, MM RUR, %

Distribution TAC as % of O&O Text-based Revenue, MM RUR, %

207 211 226277 294

368

526

665 65761% 61% 62% 62% 62% 63% 64% 64% 64%

40%

45%

50%

55%

60%

65%

70%

0100200300400500600700800900

1,000

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12

Partner TAC as % of Partner Revenue

110142 170

230 243 273 292337 335

6% 7% 7% 7% 8% 8% 8% 8% 8%

-20%

-15%

-10%

-5%

0%

5%

10%

0100200300400500600700800

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12

Distribution TAC as % of O&O Text-based Revenue

Adjusted EBITDA1 (RUR MM) and Margin (%)

Adjusted EBITDAFinancial Review

15

1. Adjusted EBITDA is EBITDA before share-based compensation. Adjusted EBITDA Margin means adjusted EBITDA divided by US GAAP revenues. Adjusted ex-TAC EBITDA margin means adjusted EBITDA divided by ex-TAC revenues. For a reconciliation of these non-GAAP financial measures to their most directly comparable US GAAP measures, see slides 21-23.

1 1 1

991 1,448 1,519

2,206

6,164

1,719 1,914 2,335

3,269

9,238

2,377

42%50% 49%

53%49%

44% 42% 45%51% 46%

41%

49%

57% 56%61%

56%51% 49%

54%60%

54%49%

(80)%

(60)%

(40)%

(20)%

0%

20%

40%

60%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q1 2010 Q2 2010 Q3 2010 Q4 2010 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2010 2011 Q1 2012

Adjusted EBITDA Adjusted EBITDA margin Adjusted EBITDA margin ex-TAC

Adjusted Net Income Financial Review

Adjusted Net Income1 (RUR MM) and Margin (%)

16

1. Adjusted net income is net income before share-based compensation and foreign exchange (gains)/losses in both cases tax-adjusted. Adjusted net income margin is adjusted net income divided by US GAAP revenues. Adjusted ex-TAC net income margin is adjusted net income divided by ex-TAC revenues. For a reconciliation of these non-GAAP measures to their most directly comparable US GAAP measures see slides 21-23.

1 1 1

586 935 978

1,469

3,968

1,093 1,258 1,459

2,195

6,001

1,505

25%

32% 31%

36%32%

28% 28% 28%

34%30%

26%

29%

37% 36%

41%

36%33% 32% 34%

40%

35%

31%

(30)%

(20)%

(10)%

0%

10%

20%

30%

40%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Q1 2010 Q2 2010 Q3 2010 Q4 2010 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012

Adjusted Net Income Adjusted Net Income margin Adjusted Net Income margin ex-TAC

17


Headcount Evolution

PERSONNEL1 BY GAAP COST CATEGORY

1 as of the end of the period

Items may not total 100% due to rounding

11% 11% 10% 9% 10% 10% 10% 10% 10%

53% 53%54%

55%53%

54% 55%56% 55%

37%36%

36%36%

37%

36% 35%35% 35%

1,860 1,948 2,168

2,385 2,677

3,001 3,163

3,312 3,341

26%21% 21% 19%

26%22%

19% 17%

24%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

-100

400

900

1400

1900

2400

2900

3400

3900

4400

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12

Cost of Sales Product Development SG&A Personnel costs as % of Revenue

18


Capex, MM RUR

224

742521

712

9781,128

1,711 1,749

767

10%

26%

17% 17%

25% 25%

33%

27%

13%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0

500

1,000

1,500

2,000

2,500

3,000

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12

Capex Capex as % of Revenue

Company Outlook for 2012 *Financial Review

19

Capex

• To increase 40-45% in RUR y-o-y

• Approximately 20% of Revenue

Revenue

* As of April 26, 2012

20

Supplementary Materials

21

Reconciliation of non-GAAP financial measuresReconciliation of Ex-TAC Revenues to US GAAP RevenuesIn RUR millions

Three months Three months Three months Three months Twelve months Three monthsended March 31 ended June 30 ended September 30 ended December 31 ended December 31 ended March 31

2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change 2011 2012 ChangeTotal revenues 2,355 3,894 65% 2,889 4,541 57% 3,131 5,159 65% 4,125 6,439 56% 12,500 20,033 60% 3,894 5,874 51%Less: traffic acquisition costs (TAC) 317 537 69% 353 641 82% 396 818 107% 507 1,002 98% 1,573 2,998 91% 537 992 85%

Ex-TAC revenues 2,038 3,357 65% 2,536 3,900 54% 2,735 4,341 59% 3,618 5,437 50% 10,927 17,035 56% 3,357 4,882 45%

Reconciliation of Adjusted EBITDA to US GAAP Net IncomeIn RUR millions


2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change 2011 2012 ChangeNet income 507 820 62% 1,017 1,125 11% 883 1,705 93% 1,410 2,123 51% 3,817 5,773 51% 820 1,258 53%Add: depreciation and amortization 259 377 46% 272 427 57% 307 488 59% 343 582 70% 1,181 1,874 59% 377 661 75%

Add: share-based compensation (SBC) expense 33 70 112% 32 109 241% 39 66 69% 56 84 50% 160 329 106% 70 81 16%

Add: expense for acquisition-related contingent compensation - - - - - - - - - - - - - - - - 76 -

Less: interest income (28) (34) 21% (39) (36) -8% (43) (47) 9% (46) (105) 128% (156) (222) 42% (34) (167) 391%Add: other expense / (income) net 57 254 346% (143) 33 -123% 60 (361) n/m 2 12 n/m (24) (62) n/m 254 124 -51%

Add: provision for income taxes 163 232 42% 309 256 -17% 273 484 77% 441 573 30% 1,186 1,545 30% 232 344 48%

Adjusted EBITDA 991 1,719 73% 1,448 1,914 32% 1,519 2,335 54% 2,206 3,269 48% 6,164 9,237 50% 1,719 2,377 38%

Reconciliation of Adjusted Net Income to US GAAP Net IncomeIn RUR millions


2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change 2011 2012 ChangeNet income 507 820 62% 1,017 1,125 11% 883 1,705 93% 1,410 2,123 51% 3,817 5,773 51% 820 1,258 53%

Add: SBC expense 33 70 112% 32 109 241% 39 66 69% 56 84 50% 160 329 106% 70 81 16%Less: reduction in income tax attributable to SBC expense 0 0 n/m 0 (3) n/m 0 (6) n/m 0 (4) n/m 0 (13) n/m - (1) n/m

Add: expense for acquisition-related contingent compensation - - - - - - - - - - - - - - - - 76 -

Add: foreign exchange loss /(gain) 57 254 346% (143) 34 n/m 70 (383) n/m 5 (6) n/m (11) (101) 818% 254 114 -55%

Less: reduction / (increase) in income tax attributable to foreign exchange loss /(gain)

(12) (56) 367% 29 (7) -124% (14) 77 n/m (1) 1 n/m 2 15 650% (51) (23) -55%

Adjusted net income 585 1,088 86% 935 1,258 35% 978 1,459 49% 1,470 2,198 50% 3,968 6,003 51% 1,088 1,505 38%

22

Reconciliation of non-GAAP financial measuresReconciliation of Adjusted EBITDA Margin and Adjusted Ex-TAC EBITDA Margin to US GAAP Net Income MarginIn RUR millions

US GAAP Net Income

Net Income Margin (1) Adjustment (2) Adjusted EBITDA Adjusted EBITDA

Margin (3)Adjusted Ex-TAC

EBITDA Margin (4)

Three months ended March 31, 2010 507 21.5% 484 991 42.1% 48.6%Three months ended June 30, 2010 1,017 35.2% 431 1,448 50.1% 57.1%Three months ended September 30, 2010 883 28.2% 636 1,519 48.5% 55.5%Three months ended December 31, 2010 1,410 34.2% 796 2,206 53.5% 61.0%Twelve months ended December 31, 2010 3,817 30.5% 2,347 6,164 49.3% 56.4%Three months ended March 31, 2011 820 21.1% 899 1,719 44.1% 51.2%Three months ended June 30, 2011 1,125 24.8% 789 1,914 42.1% 49.1%Three months ended September 30, 2011 1,705 33.0% 630 2,335 45.3% 53.8%Three months ended December 31, 2011 2,123 33.0% 1,146 3,269 50.8% 60.1%Twelve months ended December 31, 2011 5,773 28.8% 3,464 9,237 46.1% 54.2%Three months ended March 31, 2012 1,258 21.4% 1,119 2,377 40.5% 48.7%(1) Net income margin is defined as net income divided by total revenues.(2) Adjusted to eliminate depreciation and amortization expense, SBC expense, interest income, other income/(expense), net, and provision for income taxes. For a reconciliation of adjusted EBITDA to net income, please see the table above.

(3) Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenues.

(4) Adjusted ex‐TAC EBITDA margin is defined as adjusted EBITDA divided by ex‐TAC revenues. For a reconciliation of ex‐TAC revenues to US GAAP revenues, please see the table above.

Reconciliation of Adjusted Net Income Margin and Adjusted Ex-TAC Net Income Margin to US GAAP Net Income MarginIn RUR millions

US GAAP Net Income

Net Income Margin (1) Adjustment (2) Adjusted Net Income Adjusted Net Income

Margin (3)Adjusted Ex-TAC Net

Income Margin (4)

Three months ended March 31, 2010 507 21.5% 78 585 24.8% 28.7%Three months ended June 30, 2010 1,017 35.2% (82) 935 32.4% 36.9%Three months ended September 30, 2010 883 28.2% 95 978 31.2% 35.8%Three months ended December 31, 2010 1,410 34.2% 60 1,470 35.6% 40.6%Twelve months ended December 31, 2010 3,817 30.5% 151 3,968 31.7% 36.3%Three months ended March 31, 2011 820 21.1% 268 1,088 27.9% 32.4%Three months ended June 30, 2011 1,125 24.8% 133 1,258 27.7% 32.3%Three months ended September 30, 2011 1,705 33.0% (246) 1,459 28.3% 33.6%Three months ended December 31, 2011 2,123 33.0% 75 2,198 34.1% 40.4%Twelve months ended December 31, 2011 5,773 28.8% 230 6,003 30.0% 35.2%Three months ended March 31, 2012 1,258 21.4% 247 1,505 25.6% 30.8%(1) Net income margin is defined as net income divided by total revenues.

(2) Adjusted to eliminate SBC expense (as adjusted for the income tax reduction attributable to SBC expense) and foreign exchange losses (less foreign exchange gains) (as adjusted for the (reduction) increase in income tax attributable to the loss (gain)). For a reconciliation of adjusted net income to net income, please see the table above.

(3) Adjusted net income margin is defined as adjusted net income divided by total revenues.

(4) Adjusted ex‐TAC net income margin is defined as adjusted net income divided by ex‐TAC revenues. For a reconciliation of ex‐TAC revenues to US GAAP revenues, please see the table above.

23

Reconciliation of non-GAAP financial measuresReconciliation of Ex-TAC Revenues to US GAAP Revenues

In RUR millionsTwelve months

ended December 312007 2008 2009

Total revenues 4,249 7,649 8,729Less: traffic acquisition costs (TAC) 504 1,270 1,305Ex-TAC revenues 3,745 6,379 7,424

Reconciliation of Adjusted EBITDA to US GAAP Net Income



Net income 1,520 2,432 2,010Add: depreciation and amortization 295 600 912

Add: share-based compensation (SBC) expense 37 140 209

Less: interest income -31 -86 -67Add: other expense/(income) net 4 -208 23Add: provision for income taxes 559 947 672Adjusted EBITDA 2,384 3,825 3,759

Reconciliation of Adjusted Net Income to US GAAP Net Income



Net income 1,520 2,432 2,010

Add: SBC expense 37 140 209

Less: reduction in income tax attributable to SBC expense 0 0 0

Add: foreign exchange loss/(gain) 5 -65 64Less: reduction/(increase) in income tax attributable to foreign exchange loss/(gain) -1 16 -13

Adjusted net income 1,561 2,523 2,270

renaissance capital 16th annual 1:1 investor conference...

Documents