Hello, everyone, and welcome from me and the Schibsted team here. First of all, thank you so much for taking the time on a short notice here. I guess you saw the news this morning, which we think are quite exciting. So we thought to give you the possibility to connect with me and management to ask some questions. Kristin and PC have prepared some slides, you know, which we go through in a couple of minutes, and then afterwards we will have a Q&A session where you can raise your hand feature in Zoom, and I will give you then the word, or you can also write in the chat, and I can ask the question to the group here.
I think with this, we can hand over to you, Kristin, and the floor is yours.
Thank you, and a warm welcome from me as well. Thanks for joining. In the recent months, we have announced two landmark transactions. As you know, the Adevinta offer, unlocking 20 years of value creation, and enabling us to focus more on Schibsted's core business. The offer values our stake at approximately NOK 40 billion to represent Schibsted's full potential, thanks to the reduction of our share in Adevinta by 60%, for which we'll receive cash proceeds of NOK 25 billion at closing. But at the same time, we're also securing participation in the incremental value upside through the reinvested amount. And as you are aware, the offer period ended 9th February, and we then had an acceptance rate of 95%.
The second one, in December, is the sale of Schibsted News Media to the Tinius Trust, unleashing the full potential of our two core businesses, media and marketplaces. The scope of that transaction includes the media business area and other media assets, and the total transaction value is NOK 6.3 billion. As part of the final agreement between Schibsted and the trust, which was signed today, the trust will support the removal of Schibsted's dual class dual share class structure by January 1, 2026. Both transactions are expected to close in the second quarter of this year, subject to relevant conditions, of course. All right. So today we're pleased to announce the comprehensive capital return package of approximately NOK 24 billion.
We intend to use most of the cash proceeds related to the Adevinta offer and the media transaction to return capital to Schibsted shareholders. This represents another important milestone for us, following the substantial value creation over the last two decades, where we have pioneered digitalization in news media and also in the online classified industries. The proceeds, you know, the proposed use of the proceeds and capital return package follows a very thorough process, which we carried out over the last few months, where we have focused on shareholder returns and maintaining a strong financial position. And today's announcement is the natural next step following our previous communication over the past months. And the aim is an efficient and timely distribution of most of the transaction proceeds to our shareholders, while retaining some cash, primarily for the purpose of strengthening our balance sheet.
With that, I will now hand over to you, PC, to dive into some more detail on this.
Thank you, Kristin. As Kristin mentioned earlier, the proposed capital return package amounts to NOK 24 billion, and now I will now quickly run you through the underlying components. Upon completion of the Adevinta offer, Schibsted will receive NOK 25 billion in total cash proceeds. NOK 24 billion as cash consideration in the exchange of the 17 percentage point stake that we now are selling, plus an extra NOK 1 billion as a part of the cash settlement of the TRS previously entered into with Danske Bank. And this, as you know, we received already in Q4 last year. In addition, Schibsted will receive approximately NOK 4 billion cash proceeds from the media transaction following the completion.
This means that in total, we are expecting to receive approximately NOK 29 billion in cash proceeds in the coming months, most of which, as we have also talked about before, will be used to return capital to our shareholders. Then the update from today is that NOK 20 billion of these proceeds will be distributed via a special dividend and NOK 4 billion through a multi-year share buyback program. The remainder of the proceeds, I alluded to before, you know, amounting to around NOK 5 billion, is intended to be used to reduce our net interest-bearing debt and strengthen our balance sheet. Regarding the special dividend, this will be paid out in two tranches, taking into account Schibsted's existing dividend capacity. So a first tranche of NOK 18 billion and then a second tranche of NOK 2 billion. So let us go to the next slide and next steps.
As you know, we in Schibsted have an annual general meeting set up for 26th of April this year. Among other things, this AGM will vote for the approval of the proposed capital return package as described today, as well as the media transaction. Subject to approval at the AGM, the first tranche of the special dividend, amounting to NOK 18 billion, will be paid out as soon as practical after receipt of the proceeds from the Adevinta offer. Then, in Q3 this year, Schibsted will convene an extraordinary general meeting to approve the interim balance sheet, and then the second tranche of the special dividend...
Thereafter, and subject to approval at the EGM, Schibsted will pay out the second tranche of the special dividend amounting to NOK 2 billion, and to launch the first tranche of the share buyback program amounting up to NOK 2 billion. For each of these steps and more, further detail will be provided in due course along the way. Now back to you, Kristin.
Yes, as we come to the end of this presentation, I just want to reiterate that we are proud about the outstanding value creation that this represents and that Schibsted has achieved over the past two decades. We're also very excited about the journey ahead. We're pleased to announce the substantial capital return package today, the result of a thorough process focused on shareholder returns and a strong financial position for Schibsted. With that, I see you have several questions for us, so let's open the floor.
Thank you, Kristin. Yes, I think first in line today is Adrian. So Adrian, please unmute and go ahead.
Yeah. Thank you very much. I hope you can hear me okay. Thank you for doing this. I've got a few questions, please. First of all, can you now clarify a bit the bridge from the NOK 6.3 billion of transaction value for news media to NOK 4 billion of proceeds? I know there are some net liabilities, but I'm still missing a NOK 1 billion somewhere. Secondly, can you just clarify the year-end 2023 net debt that you reported, does that already include the unwind of the TRS? I think so, but I'm not 100% sure. And then, after this announcement, I think your net debt position will still be, you know, very, very close to zero. Does that mean that, you know, M&A is off the table?
Kristin, I think you alluded to potentially an interest in buying out the minorities in Finn. Is that completely off the table, or is that something that could still be considered? Thank you so much.
Yeah. I guess those, I can start, Kristin, and then you can add if something you want to add. So, on the media transaction of NOK 6.3 billion, down to the around NOK 4 billion that we have guided on as expected proceeds, leasing is a big component, as you mentioned. Other big components is pension liabilities and other liabilities. So that is what brings this down to, you know, dimension around NOK 4 billion. I think we don't know the exact numbers before we have closed the transaction. So the update is, you know, slightly higher than the NOK 4 billion that we have used here, but not significant. Yes, you are correct on the second question, around the net debt at the year-end.
That includes the proceeds from the TRS of NOK 1.2 billion. So, you know, if you normalize for that, you will have, I guess, around NOK 5.6 billion in net debt. So, your question around reserving that NOK 5 billion for strengthening our balances will bring us to ± zero, as it stands now. Then we will continue to work on our strategy and our financial framework and plans for the rest of the year. And then we'll come back to you in Q4 on CMD, when we will kind of lay out more details around what we see as a feasible capital structure for the revised company in the future. And so I think it's—don't read more into it than that.
There's no specifics around kind of do we want to do M&A or not do M&A? I think we, we expect to have a company with a strong cash flow generation, and then we expect to have a company with a strong balance sheet, and that will give us, a good starting point. But more details to come later in the year.
Adrian, does this answer your question or do you have some follow-up?
No, I'm all good. Thank you so much for the answers.
Okay. I think next in line, Will, we can't see you, but we'll see you in line, so please unmute.
Hi there. Thanks for taking my questions. Firstly, could you update us on dyssynergies? How should we think about that as the media assets are separated, that central cost number, is there upside, downside? Can you just help us think about that? And then could you just talk through the relationship with the delivery assets, with the media assets? Will there be some kind of long-term contract signed? How should we think about that? Because obviously that's staying held with the parent and Schibsted.
Yes. So, we haven't disclosed any details around dyssynergies or synergies, anyway upsides from that. We are in the middle of the process of, you know, preparing the separation of the companies, which is unclosed. Even if we now have announced the signing of a formal agreement, we're still working on, you know, preparing and actually doing the closing. There will be some dyssynergies. We have talked about in the advertising area, where we have, you know, a good collaboration today between these assets. And also, you know, by separating out several of the common functions we were doing that. So what we're doing now is to prepare and execute the separation, trying to mitigate as much as we can of dyssynergies.
And then on the other side, I mean, also, we talked about before, is we believe that there are opportunities when we become a smaller and a simpler company, you know, to take a review of, you know, how we are organized, what is our agenda. And this is, you know, the core of working on now, and we'll bring back to you in the CMD towards the end of the year. So where exactly it ends and how, I think we will come back to. When it comes to delivery, delivery will be part of marketplaces, as we have updated you before. Basically supporting, you know, our media, obviously, of the distribution of newspapers, but also a very core component of the, you know, supporting the e-commerce business in the Norwegian market.
So what we have agreed is a commercial agreement that, you know, to continue support in line with the current terms and conditions that we have for some time. We will have flexibility both to kind of extend that and opt out of that going forward. As we expect, you know, the distribution of physical newspapers will continue to go down in the coming years and become smaller and smaller part of that business.
Thanks for the color.
Thanks, Will. I think next in line is Pete. Pete, just unmute, please. Go ahead.
Hey, guys. I'll, I'll continue with the same topic, actually. So as you said, PC, that print distribution continues to go down over time, as is, like, structural. Do you think the delivery business is gonna be part of Schibsted even if print goes away? So is the e-commerce side, like, scalable or sufficient enough to maintain the delivery business as a standalone? I have other questions as well, but maybe we go one by one.
Yeah.
Yes.
You know, I think what we have said is that, you know, for now, it is important to keep it both to, you know, it has been important for media, but it is also important to secure the ramp-up of our e-commerce offering and make sure there is competition in the market. And we know that the transactional model is very sensitive to good distribution and reasonable, reasonably priced distribution. Our goal is that once paper has declined so much that we, you know, that we might live without it, that we will have a sustainable business based on parcels, and that that business could potentially then be divested. But a divestment of delivery would entail that we, one way or the other, would need to secure that we have a good offering for e-commerce going forward.
But, you know, we also need to consolidate the ownership around delivery, which is not complete yet, because right now, you know, as you know, it has a bit of a complicated setup in terms of ownership. So there are some things that need to fall in place, and I think we will have much more clarity about that in, let's say, two to three years.
Thank you. And the next question is on CapEx and leases. So can you give some indication, like, what should we expect for CapEx and lease costs as news media goes away? I think you have commented that you expect stable or flat that you used, but is this on a group level or for the Nordic marketplaces alone? Because obviously, news media is a sizable CapEx spender. It's not the largest, but it's still a sizable CapEx spender. So if the group level CapEx is flat, then it means that like for like, Nordic marketplaces CapEx is going up. So can you clarify, like, which one is it?
So any guidance or perspective that we have given so far has been in our current structure. So we haven't given any kind of updates on how we expect the development to be in the revised sort of Schibsted Marketplaces' scope. So what we have said for the current scope, that CapEx this year to be relatively, you know, stable. We haven't. And I think you could assume that that is also a general message for, you know, both the media side of the business and the market side of the business. So don't expect any sort of significant deviations there also after. I don't think I can go into more details at this stage.
We are now working on both doing the actual separation, so we have a clear picture of the, let's say, starting point financially, and then also the agenda ahead. But don't expect any major shift.
All right, understood. Thanks. And one last, and I will go back to the queue. So on HQ cost, there was a question on the synergies already, but is the discussion now basically the level of the synergies, or is it really that there's no synergies or no potential to reduce HQ cost after this divestment?
Yeah. So what I said, there's absolutely potential, you know, to take a relook of, you know, our current cost structure, how we are organized, how we are set up. You know, because we have a group structure today that is set up to support a much bigger, you know, company than what will be the case going forward. So, I mean, we are obviously now looking into what is the sort of a feasible organizational structure, what type of functions do we need? What are the dimensioning of those functions? And we are in the middle of that work. And that should yield, you know, sort of, you know, good cost reductions opportunities. But of course, it needs to be, you know, connected to what is our strategy and our agenda going forward.
Given that we are in the middle of this phase, as it be, we need to bring these different components together towards the end of the year in one Capital Markets Day.
All right, very clear. Thank you.
I think, Henriette, you had your hand up. I don't know if your questions are clarified now or?
Yes, I had a question about HQ cost, but if you can give an estimate going forward on how and what we can think about the HQ cost as the news media goes away, but you have partly answered my question.
... I don't know if we can say-
Have more to say at this point, right?
Oh.
We need you to be a bit patient with us, and we promise to come back with way more details in due time.
Okay, thanks.
Pete, just look for the chat while we stay. Go ahead and unmute.
Okay. Well, I'll then ask on, you mentioned on the, the delivery potential future divestment and the ownership structure that needs to be solved before that, but what is your thinking on the acquisition of the minority stake in Finn? Is the logic somehow the same, or are those two separate?
I think I actually, you know, I did mention it earlier, and I don't think I have anything further to add right now. I don't think it would be appropriate to comment on that now.
Okay. All good. Thank you.
There's one question from the chat related to the transaction with the trust. PC, maybe if you can comment for the reason why there was a change from the earn-out to a fixed upfront fee amount in the final agreement now?
Yeah. You know, when we looked into it, I mean, I would rather have the money in clarified and in the bank now than having it sort of depending on, you know, a future number. You know, it's quite a lot of complexity of, especially during the year. So I think both sides just looked at this and figured out this is simply the whole structure just to agree on a fixed amount.
And that fixed amount is NOK 180 million, which I think is a good number, given that we get, you know, money, a lot earlier, and it is a certain portion. So don't read more into that than that. And then, of course, that is mainly the different numbers that we communicated in December, because that is now added to the value and the expected numbers.
And then there's another question on the chat. Do you have an assessment of the withholding tax or any other tax frictions for investors, and also Schibsted as a company?
Yeah. So I think we don't have any tax implications. For our investors, it does, and it has been a main topic over the last, you know, five to six months. We have had dialogues with, you know, most of our key investors, trying to understand their situation and getting their feedback into what will be kind of the most appropriate capital return package. And I think we have reached a good kind of conclusion and a balanced approach, where there is a, you know, a big part of our investor base has a strong preference for cash. But we also have a sizable portion of share buyback, and we also are able to take it almost like a quarter of the cash proceeds as a capital repayment.
These are things that is, you know, we have put in place in trying to balance the different perspectives amongst our investors.
Thanks, PC. I think Adrian is back in the queue, so please unmute.
Yeah. Sorry to bother you. Actually, PC, my question was related to this, like, how did you decide between the dividend and buyback allocation? Because, of course, there's a withholding tax that will apply to the dividend, whereas the buyback is largely tax-free. We've seen a bunch of UK companies opt for tender offers, for example, on their stock. Is that something which has been explored? Why so much into dividend and a bit less into buyback? Was it to protect liquidity of the shares? Anything that you can bring, please?
Yeah. So, I mean, this is not an exact science, right? So, it's been clear along the whole way that, you know, the amount of money we're talking about here, you should expect, you know, a cash component. And then we have been quite clear that we explore all options. We have explored more, let's say, structural, not so uncommon, options as well, but concluded that that's not really feasible and doesn't solve any issues. So we kind of left with share buyback and a cash dividend. Then I got a regular market-based share buyback program has limitations on how much we can do, given our liquidity in the stock.
In general, we can run around NOK 2 billion a year, and we felt that, you know, having a bigger portion than a kind of two-year kind of program, where we kind of split it into two tranches of NOK 2 billion, is not so common and probably will be a bit tricky to explain to the market. So that's why we kept it at NOK 4 billion. Then we have had, you know, discussions and around should we be a kind of tender offer on share buyback, but it's been pretty clear feedback from a majority of our investors that they would like to prefer a cash dividend versus a tender offer, and that's the reason why we ended where we are.
Yep. Super clear. Thank you.
I think we have no questions on the chat, but yeah, I think Pete is back in the queue, so please go ahead.
Yeah, one more for PC. You mentioned in the news media divestment or the kind of difference between TV and the cash proceeds. Can you give any kind of indication on the pension liability size that's gonna come on the Schibsted group balance sheet?
Yeah. Have we said anything about that before? No, we haven't. So I think it is a sizable amount, you know, but I don't think we have disclosed the details around that.
Okay. All right. Thanks.
While we wait maybe for the queue again, there's a question on the CEO transition in the chat. Has the board described the profile you're looking for in new CEO?
I think you'll have to ask the board about that.
Okay. Currently, no more questions on the chat. So let's see if someone wants to use here the possibility in the right-hand feature.
Seems like, yeah, we have answered their questions.
Yes, seems like there are no new questions. So, then thanks from my side for, for joining. And, of course, if you have follow-up questions, please reach out by email or just call me. And, Kristin, maybe you want to say maybe, maybe a few words in the end?
No, just thank you. Wish everyone a happy Easter, and, thanks for your interest.