Hello everyone, and Welcome To Today's Baltic Classifieds Group 2025 full-year results announcement. My name is Seb, and I'll be your operator for the call today. If you would like to ask a question during the Q&A session, please press Star 1 on your telephone keypad. To withdraw your question, please press Star 2. I will now hand you over to Justinas Šimkus, CEO, to begin. Please go ahead.
Good morning. I'm pleased to announce that the Baltic Classifieds Group has achieved another successful year. We have continued to see a strong momentum in our core business, have delivered performance in line with guidance provided at the beginning of the financial year. We have successfully fulfilled all our commitments, including financial, governance, capital allocation, and ESG objectives. Our revenue grew 15%, exceeding EUR 82 million. Our EBITDA grew even more, 17%, reaching over EUR 64 million, with an industry-leading margin of 78%. Cash conversion was close to 100%, and we have significantly reduced our leverage from 0.5 to 0.1 times EBITDA. We returned close to EUR 30 million to shareholders by the way of dividends and share buybacks over the year, and we voluntarily repaid EUR 25 million of debt.
Also, I'm pleased to announce that the board has proposed a final dividend of EUR 2.60 per share, which is 24% higher compared to last year, and to be paid after AGM. In our view, this has been a solid year, as the strength of our financial performance was supported by the resilience of our operational KPIs, which were at record highs, as you will see in the following slides. We reported strong annual revenue growth across all four of our business lines. We initiated a pricing event for our private customers a year ago in May and then improved our pricing and packaging for our business customers in auto. The core revenue, B2C and C2C, contributed 90% of total revenue. I've been offering a particular note with significant growth in both number of customers and yield expansion.
We had record high customers in autos, plus 4% in real estate, 1% more in jobs. The yield has improved significantly, with 15% growth in autos, 20% growth in real estate, and 12% growth in jobs. Our lead over a close competitor, which we internally consider to be the most important KPI, remains strong across all major portals, ranging from 5 to 36 times depending on the portal, and implies that each resident in the Baltics visited BCG portals 9 times per month. Additionally, we acquired UNTO. lt during the year, an automated property valuation tool for sellers, and a lead generation platform for agents. This acquisition is intended to enhance BCG data-driven services and present new revenue opportunities in the near future. We completed our annual employee engagement survey, and over 95% of employees are proud to be part of the team.
This dedication and commitment is what makes BCG such a successful company, and that directly leads to such a high average tenure of 9 years, which is remarkable in such a technology-driven company. BCG has maintained a %balanced gender diversity ratio with 49% to 51% female and male split. Moreover, BCG was ranked within the top five best performers within the FTSE 250, with 50% of women in leadership positions. BCG has achieved an impressive 30% reduction in CO2 emissions and exceeded our near-term targets in Scope 1 and 2. This achievement was driven through the continued focus on using energy from renewable sources, with 88% of the total energy consumption coming from the renewable sources. Now I'll hand over to Lina to talk about financials in more detail.
Thank you, Justinas. Good morning. BCG revenue grew by 15% during the year. We observed sustained momentum in our core business. As already mentioned, 90% of revenue comes from our core, which is listing fees from both contracted clients B2C and individual self-service users C2C. B2C revenue accounts for 51% of group revenue and grew by 17%, and C2C revenue, representing 39% of group revenue, grew by 13% this year. The remaining 10% of revenue comes from non-core revenue streams, ancillaries, and display advertising. These also performed well. Ancillary revenue, making up 5% of total group revenue, grew by 17%, and this growth is primarily driven by our financial intermediation business, our white label car loan solution. This year, we also saw strong growth in data services, particularly from car history check reports in both Lithuania and Estonia. Display advertising, also contributing 5% of group revenue, grew by 5%.
We saw growth across all business lines, with our verticals leading the way. On the upper right, you see the donor chart showing revenue split by business line, and our verticals combined generate 84% of group revenue. Autos, our biggest business line, grew by 14%, driven mainly by yield improvement, and that's thanks to increased uptake of packages. The second biggest, Real Estate, was the standout performer this year, with revenue growing 23%. The growth was fueled by a higher number of ads, a shift towards longer period packages, and further yield improvement. Jobs and Services grew by 15%, and within the segment, Jobs is the B2C component, grew 14% by attracting more companies and improving the yield.
Services, which is the majority of the business line C2C and accounts for 20% of this business line, grew 22% from an increase in users, more active ads, and also improving the yield. Generalist revenue grew by 5% through yield improvement. Overall, our revenue growth was driven by a growing base of advertisers and listings, along with yield improvements across both B2C and C2C segments. Simonas will talk much more about it in his slides, but when it comes to yield, this year we continued with our regular schedule of pricing events. At the start of the year, we implemented C2C pricing changes across most of our platforms, and these have contributed to performance throughout the entire year. Also, in line with previous years, in September and October, we introduced B2C pricing and packaging changes in auto, real estate, and jobs platforms.
These updates had a more pronounced effect for the second half of the year. In the jobs business line, because most of the contracts are 12-month duration, the impact of pricing changes is flowing through gradually over the course of the year. The cost discipline continued to drive operating leverage. Over the year, our team expanded to 156 full-time employees. The average number of full-time employees grew by 9% from 136 a year ago to 148 this year. Investment in our people increased by 11%, reaching EUR 12.6 million, and of this, EUR 1.9 million related to long-term incentive plan costs. The main driver of the cost line growth was already mentioned: headcount expansion and also regular annual salary reviews being broadly in line with wage inflation in the Baltics. Programming, development, and system administration are all handled in-house, with associated costs captured under salaries.
Marketing costs this year increased by 6%. The majority of group traffic is organic, direct and unpaid search channels, accounting for more than 80% of total traffic. Unpaid search traffic is minimal, and as a portfolio of brands, we leverage our own websites for advertising and this way minimizing reliance on external service providers. We own Generalist Skelbiu.lt, which is ranked the sixth most visited website in Lithuania in this home of strong vertical categories. Skelbiu drives high-quality traffic cost-free through our leading vertical platforms through cross-listing. That is a truly unique portfolio setup and one of the reasons behind our strong EBITDA margin, as our total marketing costs remain at just around 1% of group revenue. IT costs, which reflect third-party services, grew by 3% and account for 1% of revenue.
Other costs, which include everything from office expenses, data costs, to costs associated with being a public-listed company, grew by 7% and now represent 5% of revenue. In total, operating costs before depreciation and amortization grew by 9%. In the bottom column chart, you see the depreciation and amortization split into one from acquired intangibles and ongoing CapEx-related depreciation. The 37% decline you see in amortization from acquired intangibles is due to the full amortization of most business client relationships acquired in financial year 2020, which then were assigned a five-year useful life. Ongoing CapEx-related depreciation increased by 4% this year. In terms of profitability, with a 15% increase in revenue and continued discipline cost management, our EBITDA grew by 17%. There were no add-backs to our EBITDA, and we continued to expand our EBITDA margin, which increased by 1 percentage point this year, reaching 78%.
On the right-hand side, you see EBITDA to net cash bridge. We continued to be highly cash-generative, maintaining a 99% cash conversion rate. Cash generated from operations grew by 13%, but it's worth noting that last year's figure included a one-off tax-related saving. Adjusting for that, cash from operations grew by 15% on a like-for-like basis. Net cash inflow from operations increased by 12%, reaching EUR 57.4 million. Again, if adjusting comparatives, net cash inflow from operations grew 16%. Adjustments to IFRS figures remain limited, as amortization of acquired intangibles and associated deferred tax impact. Adjusted operating profit continues to closely align with EBITDA, grew by 17%. Adjusted net income, from which one-third went to dividends, increased by 21%, reaching EUR 54.4 million. During the year, the company purchased and canceled 4.6 million ordinary shares, representing 0.9% of the issued share capital at the beginning of the year.
As a result, adjusted basic EPS grew by 23%, reaching EUR 11.3 per share. The proposed dividend of EUR 2.6 per share, together with an interim dividend already paid in January, brings the total to EUR 3.8 per share. That's also an increase of 23% compared to last year. As mentioned before, we generated EUR 57 million in net cash from operations during the year. We started the year with EUR 50 million gross debt, EUR 27.5 million net debt, and 0.5 times leverage. During the year, we paid final 2024 dividend and interim 2025 dividend. That's EUR 15.9 million in total. Spent additional EUR 2.4 million to repurchase shares for future employee awards. Repurchased and immediately canceled 4.6 million company shares. Acquired UNTO.lt, and voluntarily repaid half of the outstanding gross debt.
As a result, we ended the year with gross debt of EUR 25 million, a leverage ratio of 0.1 times net debt of EUR 3.6 million. Our capital allocation priorities remain largely unchanged. We will become debt-free this coming year. We intend to continue returning one-third of adjusted net income each year via an interim and final dividend split approximately 1/3 and 2/3. If approved at the AGM, the final dividend for the year 2025 will be paid on October 17 to members on the register on September 12. We will continue considering value-creating M&A opportunities. All options for financing attractive acquisition opportunities remain open, including using debt on cash and even seeking additional equity capital. We intend to continue to return meaningfully all our excess cash to shareholders in a timely manner, with a preference to share buybacks. Thank you. I now hand over to Simonas.
Hello everyone. As you've already been used to, in the next four slides, I will walk you through our main KPIs for each business unit. The automotive market is performing well, both the number of transactions and average car price having increased by 6% and 3% respectively. In the middle right chart, you can see that private sellers have listed 5% less ads compared to last year. The active ads shown in the top right chart represent the inventory level on the platform, and it has increased by 4%, mainly due to increased share of longer listing duration packages. As a result of our pricing adjustments, the average revenue per listed ad has increased by 21%. In the B2C segment, customer base is stable, while yield increased by 15%. The main reason for the growth is the higher adoption of premium packages driven by new products and pricing changes.
In the bottom left, you can see that our lead versus closest competitor is very strong, six times in Lithuania and 36 times in Estonia. In real estate, after the slowdown in 2023 to 2024, the real estate market has entered a growth phase. Activity increased in the first half of the year. In the second half, the growth was even more pronounced, with the annual number of transactions rising by 10%. Average price remained stable, and market sentiment among agents is very positive. Private sellers listed 1% more ads. However, a share of longer duration listing packages has led to a 12% increase in the C2C inventory. Pricing adjustments introduced in late spring and C2C customer base segmentation have resulted in a 22% growth in the yield per listed ad. The number of B2C customers increased by 4%, while the average revenue per broker grew by 20%.
This growth was primarily driven by the annual pricing and package adjustments. We maintained very strong need both in Lithuania and Estonia. Our platforms are respectively 27 times and 13 times bigger than the competitors. Let's take a look at jobs and services. The jobs market stays active. The unemployment rate has slightly increased to 7.1%. However, the total number of employed persons also increased during the year, reaching the highest level since 1998. Average wages have grown significantly, increasing by 10% over the past year. The market continues to provide a favorable environment for our business. Companies are investing in recruitment and retention of employees. As shown in the bottom right chart, our customer base grew by 1%, and average revenue per customer increased by 12%. I will remind you that the C2C part of our jobs and services unit is represented by the services segment.
You can see the chart in the top right. This segment keeps growing rapidly, both in volume and yield. The number of active ads increased by 8%, and the yield grew by 14%. Our job board maintained a strong leadership position, with a lead of five times over the closest competitor. Our biggest services vertical, Paslaugos.lt, is two times bigger than the main competitor, which is actually the service category of our own generalist Skelbiu.lt. Our main generalist Skelbiu.lt in Lithuania accounts for 69% of generalist business line revenue. It is important to stress that this is not a typical generalist. Approximately 70% of its revenue is derived from vertical categories: automotive, real estate, jobs, and services. Therefore, Skelbiu.lt competes with our own market-leading verticals. As Lina said, Skelbiu.lt ranks as the number six most visited website in Lithuania. We strategically leveraged Skelbiu.lt to strengthen our vertical platforms.
We have cross-listing, which generates high-quality traffic to our vertical platforms, strengthening them even more. Generalist platforms experienced modest growth. We had 10% fewer paid listed ads compared to last year. Please note that Skelbiu.lt has both paid and free ads. In the top right corner, you can see the number of active ads, which reflect the total amount of content on the site, including both paid and free ads. Last year, the number of active ads grew by 3%, and we increased yield by 17%. I mean, yield per paid ad by 17%. Our lead versus closest competitor in Lithuania remains as strong as ever, 21 times, and in Estonia, three times. We are rolling out numerous improvements to our platforms. I would like to highlight a few of them in the next few slides.
Starting from Autos, Autoplius.lt and Auto24.ee now allow both private and business sellers to attach a car history report to any listings. The seller purchases the report, adds to the ad, and every potential buyer can download it free of charge. Sellers receive a list of people who downloaded the report, making it easy to contact interested buyers. From the buyer's perspective, these reports enhance confidence and transparency, giving the marketplace a distinct competitive advantage. The adoption of this feature has exceeded our expectations. Currently, 12% of car ads have reports, and this number is continuously improving. At Aruodas.lt, we launched a call register feature for agents. By using virtual phone numbers, agents can easily track interested buyers, follow up on missed calls, and manage their client database in one convenient place.
At KV.ee in Estonia, we introduced a new feature that allows agents to share performance metrics with property owners. Owners can request access to statistics about their property listings and purchase value-added services for their listing. In this slide, I would like to give a bit more color on our latest acquisition, UNTO.lt. This service allows everyone to get an instant property valuation free of charge, with the option to purchase a report that provides additional information, including historical transactions and neighboring area. If a seller decides to sell a property and chooses to work with an agent, their leads are forwarded to the top-rated professionals. These agents share a commission with UNTO if the property sale is successful. The platform enhances our lead generation capabilities, simplifies the selling process, and offers significant value to the agents by reducing the effort required to find the clients.
Let's move to jobs and services. At CVbankas.lt, we introduced an AI platform that suggests supplementary questions for candidates based on the position description. This helps create smarter job postings and aids in selecting the best candidates for the interviews. At Paslaugos.lt and GetAPro, we have introduced AI-based content moderation. This reduces the amount of manual work required. At Skelbiu.lt, we launched a paid renewal feature that allows sellers to boost their listings higher in the search results and access buyer subscriptions for a fee. At Osta.ee in Estonia, businesses can now automatically register an account. Background checks are fully automated from Estonian business registry. This allows companies to start using the platform immediately after the registration. I would like to hand back to Simonas to finalize the presentation.
Thank you, Simonas. The Baltic region has seen a period of unprecedented growth in the last three decades. This is largely attributed to high export growth, trading balance, a vibrant employment market, and tech-oriented economies. The region has also a strong credit profile and has seen a significant increase in overall purchasing power. This positive environment has created a great opportunity for our clients and our company to take advantage of growth and generate greater profits. The outlook for the future economic growth remains positive, especially for our largest market, Lithuania, which is among the top-performing economies in the EU. Further reinforcing our growth prospects. In spring this year, we implemented C2C pricing and packaging changes across all our business units, and early signs are encouraging. We plan to implement B2C pricing and packaging changes in September and October.
We expect to deliver a revenue growth close to last year, with the second half performing more strongly than the first half. Real estate, jobs, and services, and our Lithuania OTA business together are expected to lead the growth, with generalists growing at a more moderate pace. The Estonian OTA market is showing some gradual recovery, but our OTA business in Estonia is unlikely to see year-over-year growth until the second half of the year. We expect to maintain our EBITDA margin while continuing to invest in the product development. The capital allocation policy remains largely unchanged. However, during the coming year, we will become debt-free. In the absence of M&A opportunities, we intend to continue to return meaningfully all our excess cash to shareholders in a timely manner, of which at least 1/3 will go through dividends and the preference for the remainder through the share finance.
That concludes our presentation, and we are happy to take your questions. I see Oskar was the first to raise, unless you say one first.
I'll just offer you these. It's Jessica Pok from Peel Hunt. The first is, you talked a lot about the impact of the contacts on Estonia. Can you just give us a bit more color about how you see the Lithuanian auto business developing for this year? The second is, you seem quite confident that Estonian auto's business will kind of go back into growth post the whole year, which is the comps. If it's the case that weakness persists, are there levers you can pull to support the growth in that business going forward? The final one is just onto the acquisition. I think you're going to incorporate the capabilities into your real estate listing packages. Can you give us an idea of what that will involve and how long it may take to implement that?
I'll start with the first part. We're going to bring our automotive business line in Lithuania. In terms of the quantity, Lithuanian automotive businesses, two-thirds of our automotive business line in Estonia is one. It's almost twice bigger. The Lithuanian automotive business performed very well last year, growing above the growth average. This is the same expected for this year. Estonian automotive business is currently performing below last year's performance, but we're expecting that in January, we will already return to the year-over-year growth. That's actually part of the fact that we see already a gradual market recovery. Secondly, it's due to the fact that actually the comparables already in the beginning of the next year will be so low. We can't see otherwise happening.
Overall, on the car tax, we think that it is—we think that the car tax does not change overall market structure. With the car tax, the ownership of the car became 10% more expensive. I think that all of us would agree here that it is not a major change. There are many countries in the world where the car taxes are 100% or 50%. In Estonia's case, the car suddenly became 10% more expensive. What happened before the introduction of the tax? People were expecting that it would be introduced. A lot of demand was put forward. Last year, October, November, December, we saw a huge amount of transaction, huge growth in transaction. After the introduction, we saw a decline. A lot of people fulfilled their need to transact a car clearer with the introduction of the tax.
Naturally, there is less demand in the following months after the tax introduction. That is expected to be gradually recovering because there is still the same amount of cars on the market. The structure, it is not—the tax does not change the market structure as is. Also, the car tax does not kind of change the way people are thinking about owning a car or not. In general, I think that it is important to understand that Baltics' car is kind of—it is a must. It is not like a luxury item. It is a must item. Most of the commuting is happening with a car because the Baltics are not very—well, inhabitants number, it is quite low inhabitants number per square meter. Basically, whenever you are traveling through the cities, you are doing it with a car. For example, train infrastructure, other infrastructures are much less developed.
It is kind of—it is a must-to-have item. That is why we feel confident that the station will return to the usual station soon. The second question is on—
Actual leaders.
There is always a leader. I mean, when you're running a really strong leadership, strong leading platform, there is always a leader. The question mark is if you want to pull it or not. I think that the way we are looking at that, we see that the Estonian market will be weaker, especially in the first half of the year. We do not think that it is a good time to pull the leaders. On the other hand, we see that other markets like automotive in Lithuania, real estate in both Lithuania and Estonia, they will be growing quicker and ahead of the group average. These are the leaders we are pulling. The third question was on UNTO. Maybe just to give you a bit more color, we developed a year ago a car history report on automotive.
The performance of this product really exceeded our expectations. We integrated these reports for the dealers. Later on, we integrated those for private listings. It is kind of the product which gives you three win-wins, let's say. Basically, the customer is very happy. The customer who is buying a car is very happy because it gives much more transparency and much more trust. The seller is happy because it gives more leads to the seller. We are happy because we monetize, and it makes our business stronger. Kind of encouraged by this success in automotive, we decided to expand in real estate. We acquired this UNTO.lt platform, which in general targets passive real estate sellers. It gives you the ability to evaluate your property. You are getting monthly updates about your property. What is happening in your neighborhood?
How the prices are changing? How many transactions, etc.? You are getting very relevant information. You are also becoming—you are quite engaged with that because everyone is interested in what's happening with their property. Already in the platform, there are over 150,000 valuations. It is quite already some 10% of the total market, maybe more than 10%. When the customer decides to sell, we are trying to connect this customer with a broker. In case they sign a deal and the broker sells the property, the platform charges up to 35% commission or up to 35% take rate from the broker, which is massive. Our idea, once we plug in this acquisition into our ecosystem, is first of all, we can actually integrate these reports into the business packages.
This is very beneficial for the brokers because one of the most difficult conversations the brokers have with owners is about how to evaluate the property, what should be the price of the property. Usually, the people, the owners, are kind of valuating their property higher, and the broker is trying to make the expectations reasonable. Providing these reports and including these reports into the broker packages, for them, it will help to have more easier conversations with the homeowners. We expect that they would value the service, and that would be a tool to increase our premium, the transaction power of our premium package.
Secondly, we will plug in this platform into our ecosystem, and we expect to deliver more leads to the brokers through our system, and then monetizing these leads as a commission from the broker's commission, which is likely to be a nice revenue stream. Thank you. Yes.
Thanks. Oskar from Investec. Just a couple of sort of questions that I guess sort of relate to those. You talked about UNTO and sort of car histories. Perhaps sort of give us your updated thoughts more generally on sort of what are the opportunities and risks of potentially evolving towards more transactional models? What other things could you do on that front? Then sort of similarly, do you see any sort of other potential tax policy changes on the horizon or heard any sort of political discussions, whether that's around corporate tax rates and residential tax sort of that might be sort of put in place? Anything you've heard? Thanks.
On the first question, basically, UNTO is a perfect example where you actually monetize the transaction because if you provide the lead to the broker and the broker makes a transaction, the broker is actually paying a commission, basically a third of this commission to the platform. It is a perfect example of the transactional model. Basically, this is what we are aiming. On the tax policies, maybe Lina will talk in more detail. I think I would say just a few words. In general, I think that the governments are looking at the Baltics as a low-tax region because being a low-tax region is key for the small countries attracting investments, attracting new companies, holdings, etc. Basically, the governments are looking at the region as it has to be a competitor in taxes.
At the same time, when the wealth of the region is increasing, so it's also the natural path that more and more taxes are being distributed through the budget. We should be expecting that the taxation should be growing, but still kind of being a competitor compared to the European or global, let's say, peers.
Just adding to what Justinas said, a reminder, in Estonia, we do not pay corporate income tax as long as we do not distribute the profits. In Lithuania, we pay corporate income tax every year. Up until this year, it was 15%. Starting 2026, it is 16%. It is already approved that from the following year, it is going to be 17%. The effective tax rate should be expected to increase a little bit.
If you are also maybe more asking about the more kind of detailed, let's say, real estate taxes or automotive taxes in other countries, there is no plan for automotive tax in Lithuania at the moment. In terms of the real estate, I think currently it's being debated, but it's likely that the people who have many properties or very expensive properties will have some kind of tiny tax. It would not impact our business. Quite the opposite. I think that those people who have, let's say, many properties and many properties for rent, they could suddenly decide that, "Okay, I would like to sell it." Maybe it's less—the yield has declined. Basically, if people decide to sell, it's more like a tailwind for our business because more listings, more inventory, more supply might.
In autos, we have the tax since 2020. It is smaller than in Estonia. It is only a registration tax, but we have that. We saw an impact in that first year. It exists.
Hi, guys. A couple from me if I can. First of all, just on UNTO.lt. I think this is the first time you've moved into seller leads. Could you give us a little bit of color on how you're thinking about that strategically as part of the real estate portfolio? Secondly, back to the Estonian car tax. Are you able to give us any indication of how the impact has been different between B2C, C2C, if it has been different at all?
In the first part, we have a very strong C2C segment, which we love. However, there are people who are listing the property and, for example, do not complete the listing process. They come to the listing, let's say, payment window if they do not complete. Usually, the healthy number is around 20% of people do not complete for different reasons, but it is kind of consistently over the years, but around 20% do not complete. There are people who list their property, and they do not sell. The most common reason why people do not sell is their price expectations and reasoning. Those two moments are when people consider maybe I should not prolong or list on the platform as a private individual, and maybe I should seek help or a professional. We know these people. We have these people in the database.
Our idea is to connect these people through our platform with well-rated, well-performing brokers and monetize and take our fee for the connection. As I said, the monetization is very good, up to 1/3 of the broker's commission. That is quite good monetization. Even comparing, if we say that our take rate for the listing fees and subscription fees are 3%, here it is up to 35% sometimes. We like that. This is how we are plugging in our platforms. This is how we plan to increase the number of leads which go through the platform. Second part. How it impacted the B2C, C2C. B2C, they were acting more professionally.
B2C were trying to sell more; they were growing the number of stocks before the tax introduction and trying to sell as much stock as possible because they were anticipating that after the current introduction, it's probably a number of transactions will decline. B2C revenue were less impacted, and C2C revenue was much more impacted. It is not related with C2C price sensitivity, listing price sensitivity or whatever. There is a market sentiment that now it's not a good time to sell a car, not a good time to buy a car. It's a market sentiment which actually postpones your C2C decision to change your car. Change meaning sell and buy a new one. We expect that this will just gradually recover. We have already seen that situation in Lithuania in 2020, what Lina mentioned. Basically, it was a similar situation five years ago.
It was exactly before the car introduction, surge in number of transactions, and then decline afterwards, and then gradually recover.
Monique, if you can go for Williams from Edison. Just coming back on this pushing the property sellers towards the brokers. You're saying you're doing that, giving the brokers warm leads from people who fail to sell. Surely you've got an incentive now to refer more people earlier in the process, and how's that going to work? The second question is just about the general M&A landscape. I mean, you've obviously got a very attractive attribute in UNTO. Are there similar opportunities available, and what's the pricing structure like at the moment?
On the first question, we love our C2C segment. If we have, we prioritize that. If the customer is listing as a private, we love it because paying in advance, very high profitability, beautiful revenue stream. However, there are 20% of those which do not complete the payment. There are other parts of the customers which do not sell and do not prolong. For us, we see just additional we would lose these customers anyway. For those segments, we just see as opportunity to monetize. It is kind of here we do not see any conflict. Otherwise, we will lose these customers anyway. To be honest, the second part of the question, I did not hear what was.
About the health of the M&A landscape, what opportunities is pricing?
Currently, we're not working on large M&A. There is no such M&A on the horizon. This is kind of on big M&A. Also, we remain very, very disciplined. I think that we are already four years with the company. You see that we are very disciplined. We looked over 10 companies over four years. Usually, the companies do not match our quality criteria. We do not want to just grow or buy the company for the sake of growth and dilute the quality of the company. We are very disciplined here. Currently, basically, we do not see such companies coming on the horizon. Small M&As like data products, those are likely. Whenever we do such M&As, we weigh the two options. Basically, either should we develop it in-house or should we acquire?
This was the same with UNTO.lt. We could have developed it in-house. It would have taken a year to do that. At the same time, some development costs. We decided that it is just a much quicker, much better option to acquire. The price was reasonable. We see the business not as a big business, what we acquired, but we see it as a big business once we plug in. The value of the business increases once we plug in. Sorry.
Thanks, Mr. Bartlett. I suppose just to follow up on the question over here about volumes in the B2C piece in Estonia. My understanding is the way the revenue model works is it's a number of slots. If you're a dealer now, presumably you have less inventory because there are fewer transactions in the market. At some point, it's very risk, but dealers are going to spin down and start taking fewer slots. We have not yet seen the revenue headwind on the B2C side. That's the first question. The second one is extrapolating on that. When you kind of think about the four-year guidance you've given, what are the volume assumptions embedded within that across the verticals? The third question is, can you give us a sense as to how big the price increases were in May on the C2C, please?
Dealers already optimized their number of slots. Their optimization already happened. They're not expecting further optimization. The trend which we are expecting is only up. Second part?
Volume assumptions.
In the guidance.
Real estate volumes expected to be growing. When we are saying growing, usually the healthy growth is low single digits. This is what is expected for real estate. Automotive volumes expected to be lower. The main reason is the first half of the year, second half stronger. Probably once we put the numbers for the full year, it would be lower. Jobs and services can help the growth with low single digits growth in the volumes. The third question.
C2C price changes?
C2C price changes were in line with our previous, kind of, in terms of magnitude, was in line with our previous practices. It happened in April this year. We did C2C price changes as well. The 15th, 20th time. So there is nothing unexpected. It is kind of in line with our expectation.
Just one simple question. Taking a slightly longer perspective on yields, can you grow yields consistently double-digit over the next three years across the business? Or is there a case of some elements will be softer than others, material in other areas will be very strong? Just give a feel for that kind of medium-term picture.
I have to say that we don't have long-term guidance. Official long-term guidance, we don't have such. I think the answer to your question is comparing our take rates with the take rates of the other public peers, let's say in the U.K. The current take rates in automotive and real estate, we made that size and estimated those in May this year. It's still around 3% in automotive and real estate and 4% in jobs. Compared to the U.K. peers, it's almost twice below.
Two quite specific ones for me. The first one, services, you've been growing the number of active ads kind of 20% to 30%, and we've dropped to 8%. Given where that business was, I thought that might have been a little bit stronger. Can you just give a little background on that? The second one, similar question, just on the generalist listed ads. That was a kind of notable decline. It was just to understand that a little better.
In services, the number of listed ads also only represents the paid ads. Currently, we still monetize, I think, less than half of that. Let's say around half of that. I'm not sure if I would agree with you. I mean, having high single-digit growth, a number of volumes, and double-digit yield expansion that delivers you over 20% revenue growth, that's a good revenue growth. We are happy with that. If that continues in the next five years, it would be in three years, it will be double. In five years, it will be again. We are happy with the speed of the development.
There's nothing specific in the eight, but we should think of that as a sort of more normal run rate forward-looking.
Yes, because a few years ago, it was some 20 to 30%, but we just started monetization. Naturally, when you just start, there is a bigger percentage-wise growth. In future years, it becomes lower. On the generalists, generalists' listed ads represent only paid ads. Paid ads in generalists are mainly ads in automotive, real estate, jobs, and services categories, as well as some ads by the commercial customers. Vertical categories are very competing with our own vertical. We do not have expectations that the paid ads will continue growing, actually compete with the verticals, and the verticals are kind of stronger in the competition. However, when you are assessing the strength of the platform, you have to look at the total amount of active ads, which include both paid and free listings.
You see that in the number of active ads, they continue to grow. Last year, it grew again 3%, which shows the strength of the platform. You cannot define the strength of the platform only through the paid ads. You need to also add the free listings. It is also valuable content for the consumers who are coming and searching for something.
Kind of just a follow-up to that. On the paid ads, can you just give an idea of do you expect the paid ads for Skelbiu.lt to kind of also decline this year? Also, can you just give a bit more clearance to, in terms of paid ads, which categories have had some weakness?
It's not an easy answer because if you were to ask if the ads on Skelbiu.lt in the vertical categories, which are competing with our own verticals, will decline or not, probably it will because the marketplace business is the business where the winner takes it all. If our own verticals are doing better, the number two platforms, number three platforms are doing worse. It's just how the business works. Within these paid listings, there are also other categories which are not within the vertical categories. Those might be stable or increasing. The total amount, hard to say. I can answer probably the vertical categories will be smaller, but other categories might offset.
Yes. One more, just on the content. I think you said that the brokers are paying you when a sale is completed. Can you give a bit of detail about how exactly you go about identifying not just when a sale is completed, but how that particular broker was the one who actually got that property sold?
Yes. Once the lead goes through our platform, the broker signs the exclusive mandate. Once there is an exclusive mandate, we are checking the registry, and we see when the transaction completed or not. In reality, we do not have issues with brokers cheating because the quality, the service is so good, and the brokers are valued so much that we do not want to cheat because they can cheat only once, and then you just, okay, we have another thousand brokers who can take your spot. It is kind of the brokers, in reality, they do not cheat. We have the procedures how we are checking.
That is an interesting topic that is kind of a significant part of the algorithms, which ranks the brokers, basically, because we want to find the best ones who actually do the good service for the seller and will sell because it is in our interest to get the commission. These algorithms are kind of uniquely developed, and it is a very big part of the know-how at this point, basically. Just a follow-up. Is it specific to at least a brokerage that the brokers get exclusive mandates? My question is a bit more sort of a common practice that you might have a couple of agents working on.
Actually, that's changing quite significantly towards there are no good market data, how many exclusive content and how much are multi-broker content. There is no such data. Our understanding was that actually it's more than half of the market is exclusive. Recently, we acquired the UNTO from the founder who used to own the RE/MAX franchises in the Baltics. In his opinion, 90% of the contracts are exclusive. I guess the answer how many exclusive contents there are is somewhere between our and his, somewhere in the middle like this. It's changing quite rapidly. If you were to give that question 20 years ago, the majority of the properties were multi-listed, not exclusive. It's just market is professionalizing, and the exclusive is a good thing. The more exclusive content there are on the market, it's good.
The brokers are more willing to invest in that property. There are more kind of quality, more just structural quality on the platform. It is a good thing that these numbers increase.
You said sort of no major M&A on the price. Any signs of any owners of assets in Latvia?
I'll call tomorrow to check if their position hasn't changed. We're constantly around. Apparently, no indications.
Just to kind of play the language on the buyback, assuming there is zero M&A, you're basically at net zero now in terms of net debt. Should we assume you're aiming to finish the year also at zero? Therefore, there's going to be a little bit more buyback in the year to come and the year just gone?
We want to retain flexibility. For the remaining 2/3, we'll look for ways to create more value to shareholders with the share buybacks and the preferred options.
You're not aiming to finish in a net cash position. You have sufficient flexibility at zero.
Sorry.
We have a question on the phone lines from William Packer at BNP Paribas. Please go ahead.
Thanks, Spinitz-Hadwin. Thanks for taking my question. Just wanted to circle back on the outlook for the year on the Estonian autos. From Andrew's question earlier, it is clear that the bin down has now happened in terms of slots. If we look at the C2C listings on the site, they are down kind of 20% plus. You have a price increase from the spring for C2C that offsets that partially. The price increase is blowing through in B2C, and then another price increase starts in the autumn. If we triangulate that altogether, is it fair to think that the B2C performance is the main driver of the negative revenue at the moment? The B2C is significantly more resilient. As we head into January, it would be the C2C, which will be the key driver of the rebound.
That's the first question. Secondly, the line cut out a little bit. Lina, could you just confirm what you said around corporation tax outlook? Maybe I misheard, but it sounded like perhaps there were some risks to the upside there. The final question is regarding the real estate outlook. The vendor lead product that you've talked us through sounds like it's very high potential. On the other hand, it's a bit of a transition in revenue model. Do you need that product to work, deliver the same kind of growth as you delivered last year? Or is that kind of an upside optionality? Thanks.
All right. On automotive in Estonia, again, we need to remember what was happening month over month over the last, let's say, 12 months. Before the introduction of the tax in October, November, December, there were a huge amount of surge in transactions. From January to May, June, there is a decline in the number of transactions. When we will be entering the period of September, October, November, because during that period, there were a huge surge in the transactions, we will be comparing our business to a very high comparable. The comparable will become very weak in January. In terms of the most impacted segment, you are kind of correct that the most impacted segment is C2C, although the impact was offset by our pricing event. Basically, our pricing event at some form have made the results better.
At the same time, if we think and if we plan, let's say, if we were planning the outcome for a business a year ago, we would be planning at least 15% growth here. There is no growth. Maybe there is offset from the decline in listings by the price, but there is no listing. This 15% growth is missing. It is a bit complex arithmetic here to explain by orally. It is better just looking at the number of transactions and just putting it in the table. I think it would be just more helpful.
On the corporate income tax?
Maybe just maybe one more thing here to add. We actually did explain very well. I mean, very transparently explained it in our R&S announcement. Basically, what was the impact on our revenue, group revenue, this car tax? The car tax impacted our group revenue taking from January to April,
this last four months around 3% to4% We anticipated that similar impact would be in H1 on our group revenue, but H2 would be much stronger. Basically, when we take the full year, that is why we are guiding that the revenue will be close to what we delivered last year.
Corporate income tax.
Yeah.
Will, could you maybe repeat your question? I'm not sure.
Just to clarify, should we have any expectations of changes in your group corporation tax level in the coming years? Just to confirm.
This year, our corporate income tax was 15% in Lithuania. Lithuania is the only country where we pay corporate income tax, 70% of the business there, and 15% corporate income tax. This year, this ongoing year, the corporate income tax is 16%. The following year, it is going to be 17%. Just newly approved law in Lithuania. The effective tax rate is expected to increase a little bit.
On the real estate outlook, basically, we think that the real estate revenue line will be again growth champion this year. We expect that it will deliver close to the same number of growth we delivered last year. It will be driven by, again, two main pricing events, C2C, which already happened, and B2C, which will happen in autumn, as well as supported by a very positive underlying market performance. Because in the underlying market, we see that number of transactions are growing. Our customers have a positive sentiment. They earn more. They have more kind of money to spend. That would be also a supporting factor.
Thanks, Justinas. Just one clarificatory point from the comments around Estonian autos. When you put the C2C price increase through in the spring, did you put the typical price increase through for the Estonian C2C autos, or were you more moderate in the context of the market challenges?
Typical. Typical because the weakness in the market or the weakness in listings are not related to the price sensitivity. It's just the fact that people have to get used to the tax, get used to the existence of the tax. Previously, there were zero tax. Now it's 10%. In overall, we think that this 10% is not the amount which is changing overall or impacting the structure of the market.
Very clear. Thank you.
Thank you very much for coming. Thank you for Peter. Peter, I do not see Peter. He saved the meeting. We were sitting here a minute before the start of the meeting. It was an empty room. Thank you for coming.