Good morning, everyone, and welcome to the presentation of Schibsted's Q3 results. My name is Jann-Boje Meinecke, and I'm the Head of Investor Relations. As usual, Kristin Skogen Lund, our CEO, will present the highlights of the quarter and the development in our businesses. Afterwards, our CFO, Ragnar Kårhus, will present the financials in further detail. At the end of the presentation, we will have a Q&A session. Let me highlight that the session will be different this time. You will need to call in, and it will not be possible to ask questions through the webcast player. Dial-in numbers are available on our IR website. Please call in at least 5- 10 minutes before the Q&A session starts. Before Kristin will start the presentation, let me highlight that Adevinta will be presented as discontinued operations from Q3 and until the eBay deal is closed.
As a result, consolidated revenues and EBITDA of Adevinta will not be part of Schibsted's figures. Figures for 2018 and 2019 have been represented accordingly for a like-to-like comparison. Let me then hand over to Kristin. Please go ahead.
Thank you, Jann-Boje, and good morning and warm welcome to everyone. I will start with our highlights. Q3 marks an exceptional quarter for Schibsted based on our long-term strategy and our efforts. As a next major step for Adevinta after the spin-off last year, we entered into a definite agreement in July to acquire eBay Classifieds Group, and that acquisition will create the largest online classified group in the world. Together with our board of directors and management team, I am confident that this will further strengthen the value creation potential for Schibsted and other Adevinta shareholders. Related to that same transaction, Schibsted will acquire eBay Classifieds' leading online businesses in Denmark, DBA and Bilbasen.
Together with the recent acquisition of the leading Finnish marketplace, Oikotie, that we announced in the Q2 presentation, we are sure this will enhance our position as the Nordic online classified champion and further position us for future growth. Furthermore, we achieved a very strong quarterly EBITDA. To my knowledge, it's our best ever recorded if we exclude Adevinta. Given the gloomy prospects that we had back in March when COVID first broke out, I have to say that we are pleased about this recovery and performance. Let me now give you a short overview of how our operations performed in the third quarter. Nordic Marketplaces has seen further improvements in volumes and revenues compared to the previous quarter, while underlying revenue growth was still lower than last year.
EBITDA margin for Norway and Sweden came in at 47%, somewhat lower than last year, driven by the revenue shortfall. In News Media, revenues from digital subscriptions continue to grow well, and advertising revenues, while still being lower year-over-year, improved significantly compared to the previous quarter. EBITDA was extraordinarily strong, driven by two things. Firstly, the implementation of our cost program is progressing faster than initially planned. Secondly, variable costs are lower due to remote and also to a large degree, more digital ways of working. Lendo, the main part of Financial Services, is still impacted by COVID, as banks have continued to be more restrictive in their lending practices. However, profitability was strong due to improved cost and marketing efficiency, as well as lower expansion costs. Finally, Distribution and Prisjakt within Schibsted Growth had another good quarter driven by increased online shopping trends.
As a result of higher revenues, EBITDA increased here as well. If we take a step back and we look at some of the trends that affect us, we see what has happened since the outbreak of the COVID pandemic. We see that activity in the Nordics and within our businesses has come back rather quickly after the lockdown period. As you can see here, on the left side, we see on top mobility trends for Sweden, and at the bottom, we see unemployment rates in Norway. We see the rates have improved. It will take some time, though, before the unemployment rate is back to previous levels. Our businesses are in good and some in even better positions. Driven by social distancing, consumers and businesses are seeking for convenient, reliable, and safe ways to buy and sell products and services.
As a result, digital transformation has accelerated across many industries, and this brings new possibilities for our Nordic Marketplaces and businesses like Distribution and Prisjakt. Another trend which we have witnessed is that consumers show higher interest than ever before in our independent, high-quality journalisms to stay informed in times like this. You see examples of these trends here in the middle with examples from VG and Blocket. Based on these trends, I am excited about our long-term possibilities based on our strong positions and capabilities. However, it is also important for me to highlight that visibility remains limited in the short term. Revenue development throughout the third quarter was characterized by an exceptionally strong July when people vacationed at home rather than going abroad.
You can see that here, looking at the two graphs on the far right, where you see monthly year-on-year growth in advertising revenues, as well as for our online classified revenues. Furthermore, the last week's increase in COVID infections in the Nordics and across Europe has, of course, led to even more volatility and uncertainty going forward. As I told you at the Q4 2019 presentation, we aim to create value not only to our shareholders but also to our stakeholders. Within Schibsted, we have defined 15 aspects that are important for us in our sustainability work and which are aligned with our strategy. You can see all these aspects on this slide. In our work, we prioritize based on the impact we have on society and the environment, and then we rank these aspects in a pyramid divided into three layers.
At the bottom, we have hygiene aspects, then we have focus aspects in the middle, and then we have our unique aspects at the top. The higher up in the pyramid, the higher the impact of our work. To give you an example, we can contribute to much higher savings in greenhouse gas emissions by facilitating secondhand trade on our marketplaces than what we can do by reducing our own emissions, as they are quite low in the first place. This is, of course, no excuse for not doing the latter, but it explains our hierarchy. For each aspect, we have set long-term ambitions, we have short-term targets, we have KPIs, and we have action plans. Setting the ambitions and targets and delivering on these is my responsibility as well as that of my management team.
You can read more about this in our sustainability report for 2019. Going forward, and this is why I wanted to present this slide to you today, we will periodically report to you on how we are doing on our sustainability ambitions and targets. As one example, this quarter, we have launched an investment policy for our venture business in Next, where sustainability is now included in the screening and acquisitions of potential investments. I'll come back to you on this subject once the fourth quarter has closed, and then we can give you a more comprehensive overview on what we have done and achieved throughout the year of 2020. Okay. Now, let me start with presenting the development of our three business areas more in detail. As usual, we start with Nordic Marketplaces.
As I mentioned, the revenue development in Nordic Marketplaces has improved compared to previous quarters. The acquisition of Oikotie is included in the numbers from mid-July, it is affecting our growth positively. Please note that the 3% decline presented in the left graph, that is underlying revenue development, excluding Oikotie revenues and currency effects. EBITDA margin is somewhat lower than last year due to the COVID revenue shortfall as we have started to ramp up recruitments and marketing again to deliver on our growth ambitions going forward. On the right side, we see the new revenue share after the acquisition of Oikotie, and we see that Finland has now grown from a few percentage points to 10% of total revenues in the third quarter. If we look at each country, we start with FINN in Norway. We see revenues declined 4% year-over-year.
That is an improvement from what we saw in the last quarter. The revenue development here shows mixed trends when we look at verticals, when we look at revenue types, and when we look at the different months in the quarter. On the positive side, real estate and motor experienced recovering markets and an exceptional listing activity in July due to people staying in Norway as a result of the travel restrictions. In addition to the volume growth, real estate has also benefited from new products in 2020. For example, a new product which is good for giving agents an opportunity to market themselves and their agency. On the other hand, FINN is still affected by the continued challenging macro environment, and that particularly affects our largest vertical jobs, where revenues declined double-digit compared to last year and where total volumes of position in the market has also declined.
For the travel vertical and for advertising revenues, they are negatively affected by COVID. Travel, it accounted for only 6% of FINN's revenue in 2019, but when revenue declined 70% in the third quarter due to COVID, the negative impact is actually a decline of NOK 27 million on FINN's top line. Margin in total ended at 47% for the quarter, somewhat lower than last year. This is due to the revenue shortfall in combination with having started some ramp-up of investments again. In line with previous years, margins are expected to decline somewhat in the quarter-on-quarter in Q4, driven by a combination of seasonal revenue trends and the mentioned ramp-up of investments. If you look at the full year 2020, FINN targets an EBITDA margin of around 45%.
Yet this final outcome might fluctuate based on activity in the real estate, car, and not least job market. If we look at FINN's KPIs, you'll see the chart on the left illustrating the change in volume of new listings compared to the same month in 2019. Here you can see these high levels in July, particularly in real estate that I mentioned previously. Motor volumes saw a comparable trend as real estate with good growth in July, more volatile volumes in August and September. Car dealers in Norway report of low inventories of used cars after the high demands we saw during June and July. This also decreases the number of ads being published. Volumes in jobs have improved compared to the second quarter and the end of the first quarter, but we are still significantly lower year-on-year.
Looking to the right, we can see that traffic has continued to increase even stronger than the levels we saw during spring, and all verticals except travel contribute to this traffic growth. Let's move to Sweden and to Blocket. Still less affected by COVID than FINN due to less exposure for jobs and the fact that they don't have a travel vertical. Revenues ended just below last year if you look in local currency. Motor revenues increased mid-single digit year-over-year. That is a lower growth rate in comparison to previous quarters. Remember that the implemented price model change happened in June 2019, it gives some different comparisons in the third quarter than we have seen in previous quarters.
The year-over-year growth is driven by an increase in the visibility product Bump to where you can move cars onto the top of the listing. In the private motor section, we saw the same effects in Sweden as in Norway. High volumes in categories such as caravans, boats, and motor homes related to people staying at home and vacationing in their home country. As in Norway, jobs and advertising revenues are affected by COVID-19. However, the advertising trend has somewhat improved compared to last quarter, declining only 5% year-over-year in local currency. If we look at the cost picture, hiring freezes and other temporary measures have dampened the cost increase, but we have continued to invest in product and technology capabilities, including transactional initiatives, which are still in early phases.
Examples of that are Blocket Betalning and Bil for cars or Blocketpaketet for the generalist section. These products are still early, but they are examples of our ambition and our roadmap that we believe in, and we believe these transactional services can be significant contributors to growth in the future. If we also take a look at the KPIs for Blocket, you see that motor listings have improved through the quarter. The increase in boats, caravans, and motor homes have had a positive impact, and the slight decrease in August can be seen as an effect of a very strong July. As in Norway, used cars are starting to be a shortage, and in addition, exceptionally good weather this quarter affected volumes negatively. For jobs, we saw signs of improvement in September, even though we are still far from last year.
Remember now that Bil is the most important revenue driver in Blocket. Jobs is smaller, accounting for just around 10% of Blocket's total revenues. If you look at traffic, after ending the second quarter at record levels, the third quarter followed with continued growth, leaving the quarter 12% above last year. Following the acquisition of Oikotie in July I think I need some water. Sorry. Following the acquisition of Oikotie in July, the revenue share of Finland has increased significantly. We decided to disclose more information on Finland beginning this quarter. The Oikotie integration is progressing as planned. We have a new country organization and management team in place in Finland. Looking at the financials, this graph represents Schibsted's Marketplaces Finland, combining Oikotie and Tori from the third quarter of 2020.
Oikotie figures are included from mid-July 2020 when we closed the transaction and is driving the growth compared to last year. If we exclude currency effects, pro forma Oikotie revenues for the third quarter declined 11% compared to last year, and Tori revenues declined 2% due to COVID effects. The revenue decline is due to jobs and advertising, which are, like in our other markets, still negatively affected by COVID. Real estate and the generalist vertical, on the other hand, have posted year-over-year revenue growth in the third quarter. If you look at the EBITDA margin, the shown improvement on this slide is driven by the Oikotie acquisition, while like for like, EBITDA declined due to the revenue shortfall. KPIs for Finland, we see that jobs showed signs of recovery after the summer holidays. September was a particularly good month with regard to volume.
We also witnessed strong signals for a recovery in real estate as listings have taken a significant step up during the quarter. The recovery in listings is supported by a strong development in traffic. The traffic graph to the right shows the sum of monthly visits in Tori and Oikotie, the consistent 20% + growth has helped us to build the momentum and to deliver record level of leads to our clients. Let's then move over to News Media. Strengthening our news positions by driving higher user engagement is absolutely key for News Media. Since the COVID outbreak, there has been a surge in innovation within the brands on how to create new editorial services that effectively provide users access to information in these times of extreme uncertainty. Give you a good couple of examples.
Aftonbladet set up a live studio, Corona Live, providing live reporting 24/7 and answering interactively questions from the users. This has become one of Aftonbladet's most popular services ever, building strong relationships and trust with the users and boosting the interactivity and engagement. Similarly, VG rapidly built up their Corona special overview site. This quickly became VG's highest-read and most popular service of all times. If we look at financials, News Media delivered a very strong quarter. This was driven by a positive revenue development, which I'll come back to on the next slide, combined with significant cost reductions. In the first quarter, we did introduce a cost program of NOK 500 million for News Media with full effect in the year of 2021. Like we said previously, the net effect will be reduced by inflation and wage increases.
The implementation of the program has started in the third quarter and is ahead of plan. We expect that around NOK 140 million of cost savings will be recorded this year in the second half, which is higher than the initial phasing we assumed of about NOK 100 million that would materialize this year. We see generally lower cost levels in News Media due to remote and to a large extent, digital ways of working, like I already mentioned. Let me remind you now that revenue growth numbers shown on these slides are adjusted for the regional and local newspapers that we divested at year-end, and they represent a like-for-like development. The absolute amounts in Norwegian kroner are, however, unadjusted. If you look at our main revenue streams in News Media, first subscriptions. Total revenues grew by 7% in the quarter.
As in previous quarters, digital subscription revenues continue to grow well. Strong volumes and growth in ARPU are contributing to the 21% increase in revenue. In August, our pure digital subscription revenues passed the NOK 1 billion mark on a trailing 12-month basis, and that was a very important milestone to us. I wish we were in conditions where we could have celebrated more properly. Growing digital subscription revenues is of strategic importance to us as it represents recurring revenues and contributes to more stable top-line development over time. To do so, we are continuously developing our subscription products to cater for user needs and interests, and thereby increasing ARPU over time. Creating strong value propositions in selected verticals has become an increasingly important topic within News Media, pursued by several brands.
One example is Aftenposten, which has successfully launched new verticals within parenting and career, significantly contributing to subscriber growth this year. We also see that sports and sports rights are increasingly important areas, especially for VG+ and Aftonbladet+. Moving to advertising, the advertising market both in Norway and Sweden showed significant improvement compared to the last quarter, as you can see here on the right side of the graph. Print continued to struggle in both geographies. We are pleased to see that the digital advertising market, particularly in the segment of large national advertisers, has improved compared to the second quarter. In Norway, we have seen signs of a gradual recovery in the market as the macroeconomic situation is improving. In Sweden, the advertising market is somewhat more challenging. Digital advertising revenues increased also here year-on-year. That's driven by two things.
The Q3 comparisons was no longer heavily affected by the regulatory tightening of the gaming industry, which started in the second quarter of last year. Secondly, we continued our good progress in capturing FMCG customers in the market. Finally, we have Next, and as usual, we divide that into Financial Services and Growth, and within Financial Services, Lendo is the most important one, I'll start there. In Lendo, Q3 revenues ended flat compared to last year when adjusting for currency. Sweden, our biggest market for Lendo, saw revenues in Q3 approximately on par with last year. Here we saw a continued strong growth in applications, also lower conversion of those applications into revenues. That is because banks are still more reluctant to lend than what was the case pre-COVID, we also see consumers being somewhat more cautious.
These observations are also valid in our other markets, but in Denmark and Norway, the net effect is still that we deliver strong growth. Margin-wise, Q3 was a strong quarter for Lendo. Reduced investments in international expansion due to Poland and Austria are an important part of the explanation for the improved profitability. In addition, cost and marketing efficiency improved, reflecting both that we have been structurally better and also that marketing prices have come down. If you look at Schibsted Growth, the trends from the second quarter have continued as Prisjakt, Schibsted Distribution, and the marketplaces for services, Mittanbud, continue to experience increased activity levels and demand during the quarter. Schibsted Distribution new business had a strong year-over-year growth on the back of increasing e-commerce volumes. More than 5.4 million parcels have been delivered so far this year, compared to 3.7 million during the whole year of 2019.
Prisjakt showed strong year-over-year revenue and margin growth due to high growth in traffic and clicks, echoing the same trend in e-commerce that Schibsted Distribution is witnessing. Mittanbud continued to show solid year-on-year revenue growth as well, and combined with an increase in margin. However, the overall top line is somewhat negatively affected by our advertising-driven services such as Klart.se and TV.nu. On that note, Ragnar, it's your turn to go through the financials.
Yes. Good morning, everyone. Let me give you some more details on our financials in the third quarter. When summarizing the total results for the Schibsted Group, we see that third quarter revenues are up NOK 156 million to NOK 3.188 billion. This is still in line with last year on a foreign exchange neutral basis. EBITDA, as Kristin highlighted in the beginning, was very strong in the third quarter, growing 25% to NOK 678 million from last year, and a margin at 21%. The EBITDA increase is primarily driven by the significant cost reductions in News Media. The cost reductions linked to the cost program is permanent, while some costs will pick up again when we start working less remote and also digitally once COVID-19 infection rates will allow for that.
Financial Services, driven by Lendo, and Growth, driven by Prisjakt and this time also Mittanbud, posted a solid year-on-year increase in EBITDA. The EBITDA in Marketplaces declined year-on-year, primarily due to lower revenues as a result of COVID effects. Mainly then within the jobs and travel verticals, partly offset by a positive EBITDA from the acquisition of Oikotie being in our accounts from mid-July. Taking a further look at the P&L of our operating profit for the quarter ended at NOK 360 million compared to NOK 290 million last year. Operating profit was impacted by net other expenses of NOK 95 million, which mainly stems from transaction-related costs in connection with acquisitions of Oikotie and eBay Denmark. Amortizations have also increased somewhat during the quarter due to the acquisition of Oikotie. The reported tax rate is slightly above 18% this quarter, compared to almost 29% in third quarter 2019.
Taking into consideration non-deductible transaction-related costs and a reassessment of deferred tax assets of NOK 38 million this quarter, the underlying tax rate is stable, slightly above 23%. Loss from continued operations is net loss from Adevinta, adjusted for amortizations and depreciation for the period Adevinta is classified as held for sale. Adevinta presented their results yesterday, so please refer to their presentation for more details on the Adevinta results. Our operating cash flow this quarter is down 36% compared to last year, driven by an increase this quarter in working capital and increased tax payments due to deferred payments of income tax from the second quarter to the third quarter this year due to COVID relief measures. CapEx was NOK 29 million higher compared to last year due to increased investments into product development, primarily in Marketplaces and Next segments.
Compared to the previous quarter, also the second quarter this year, it was down from NOK 170 million. Looking at our leverage, it increased to around 1.7x following the Oikotie acquisition. To finance the eBay acquisition, we have signed a new bridge loan facility of EUR 350 million. Following this acquisition, our gearing will further increase, but we have also received a consent from our banks for a temporary waiver of financial covenants from closing of the transaction until the bridge facility is repaid. We have also previously informed that our agreement with eBay gives us an option to sell to the market up to 3 percentage points of our Adevinta shares after a lock-up period, if that is needed to repay the bridge loan. Our financial target range remains at 1x-3x . I will end my presentation by giving you an update on our financial targets.
While our Nordic Marketplaces continue to be affected by the pandemic in the shorter term, we remain confident in the resilience and growth potential for the business in the longer term. We keep our medium to long-term target to grow annual revenues between 8% and 12% for this segment. Shorter term, though, to deliver on this growth ambition, we have started to ramp up our recruitments within product development and also marketing investments again. Together with seasonal revenue trends, margins are expected to decline somewhat quarter-on-quarter into the fourth quarter. Looking at EBITDA margin for News Media, we now target 8%-10% in the medium term, which is somewhat higher compared to our previous target of 6%-8%.
The more positive sentiment is due to the effects from the NOK 500 million cost reduction program and a slightly more positive outlook on the revenues in News Media. That means that the increased margin of 8%-10% presumes a more normalized advertising market going forward, in particular. From the NOK 500 million cost reduction program, we are short-term expected around NOK 140 million in cost savings to materialize in the second half this year. I will underline that in the short term, visibility remains somewhat limited due to the increase in COVID infections, both in the Nordics and all over Europe. Otherwise, our policies on capital allocation and capital structure remain unchanged. That concludes my part of the presentation.
Okay. With that, we can hand over to the operator and start our Q&A session. I hope you all dial in. Operator, please go ahead with the Q&A.
Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. And again, please press star one to ask a question. We'll take our first question from Miriam Adisa from Morgan Stanley.
Thank you. Good morning, everyone. Three questions from me. Firstly, if you could just give us a bit of an update on the current trends that you're seeing in October in the classified verticals in Norway and Sweden, particularly the verticals that have been lagging, like jobs in Norway. If you could comment on both the revenue trends and also traffic trends as well, that'd be really helpful. Secondly, on the News Media business, could you talk a bit more about the areas of incremental savings that you've managed to get this year? In terms of that NOK 500 million target, should we think about this as simply being better phasing of cost savings into 2020, or do you think there could be upside to the NOK 500 million number as well?
thirdly, on the investigation into Nettbil, could you talk about what the concerns are from the regulator and what you may look to do if this transaction gets blocked? Thanks.
Okay. I guess I can answer that. Looking into Q4, what we can say in general is that trends so far in October are fairly similar prolongation on what we saw towards the end of the third quarter. Maybe with slight improvement in jobs and maybe a possible contraction in motor due to this lack of inventory that I mentioned, but pretty much in line. As you know, we guide on FINN ending up with a margin of 45% for the full year. When it comes to the saving plans, I would say it's a phasing. We have been able to introduce the cost measures earlier. The plan is still to have a total program of NOK 500 million. Then when it comes to Nettbil, we basically disagree with the market definition that the competition authority has applied.
We do not believe that these two services are in competition with each other. On the contrary, we think this will actually expand the offer in the market. We have responded to their first notification, and we expect to have an answer back by mid-November. We plan to pursue a complaint if they do not change their viewpoint on this.
That's helpful. Thank you.
Thank you. Our next question comes from Annick Maas from Exane BNP Paribas. Please go ahead.
Good morning. My first question is regarding Lendo. I guess when the activity resumes, some of the costs, such as marketing and so on, will come back. How do we think about the medium-term margin, let's say, ex-expansion plan when the activity resumes in Sweden? My second question is on Oikotie, just now that you're integrating it, could you maybe comment on positive and negative surprises that you have experienced over the last month? My next question is, I think you've mentioned it on the call, but I missed it, so how do we think about News Media margins for the rest of the year? Finally, if you could comment on the tax rate post-Adevinta, that would be it. Thank you.
Okay. It was a bit difficult to hear you actually, but I think you asked about Lendo and margins and when we resume activities. As you know, we closed down Poland, and we're operating Austria remote. That's not going to change. in terms of the marketing, a lot of it is the fact that we have improved our marketing efficiency, and also that the cost of marketing certain search words, et cetera, has come down in the market. as such, it's not like we have stopped investing in Lendo in any way. It's just that the efficiency has improved. As you know, we have been contemplating further expansion. We are doing some initial work in Spain, but it's a bit early to say. We're still in a pre-launch phase there, and we need some more time before we can decide and tell you the plans for that.
When it comes to Oikotie and experiences, I would say, I think that's what you asked, because I couldn't hear you well, our experiences now that we've been at it for a couple of months.
Yeah, positive or negative.
I would say in general, it's going well. It's obviously a challenge to integrate two companies when there's COVID, and you can't really be together, and you can't arrange anything social, and people cannot meet as they otherwise would have done. I think our team in Finland is coping as well as they can doing that and driving the integration. We have TSA agreements with Sanoma that runs for a few more months, but we are in very good shape in terms of setting up our own systems and doing the integration ahead of time for the expiry of those TSAs. The cooperation with Sanoma is going well. On the negative side, there's always the small hiccups on the product and tech side and things like that, but nothing major as I have heard.
apart from the COVID issue, I would say it's progressing well and according to plan. Maybe you do the margin one and the tax, or maybe you do the tax one.
Looking at that, I think you asked about margin for Lendo going forward. I think it was the first question. Margin was very strong this quarter. We said we brought costs down as we started now in Q3 to having this central HQ set up for Lendo, which has led to more cost efficiency, and that will continue. In addition, with the second effect, that marketing efficiency was higher during the quarter. Looking at performance marketing and the search words for consumer loans have come down during the quarter due to the market development. That's a bit more difficult to say how fast prices will increase again, but I think that at least what happened in Q3 explains the strong margins. When it comes to News Media, we're not specific what the margin will be in the fourth quarter.
Like Ragnar said, we raised our guidance for the midterm to 8%-10%, but as remote work will continue in the fourth quarter, and the cost program is implemented a bit faster than we previously planned, margin is also expected to be good in the fourth quarter, but also depending, really, like Ragnar stated, on the development on the top line when it comes to advertising.
Tax. I think she asked about tax rates.
the tax rate too.
Can you just repeat that question, Annick? It was on the underlying tax rate or?
Underlying tax rate. Yeah, post-Adevinta, yeah. Just an indication, that would be great. Thank you.
I think underlying tax rate for this quarter was roughly 23%, which is also roughly in line with we reported for Q2. I think our statement is normally the best estimate also going forward. We don't have other indication that will change in the short term.
Many thanks.
Thank you. We'll now take our next question from Adrien de Saint Hilaire from Bank of America. Please go ahead.
Yes. Good morning, everyone. Thanks for taking the questions. First of all, to come back on the FINN EBITDA margin, am I right that you have actually slightly upgraded the target? Because you previously said upper end of 40%, 45%, and now you're saying 45%. Secondly, I can't remember when was the last time that News Media had better growth than Marketplaces. When do you think it's realistic to assume that Nordic Marketplaces go back to the normal run rates of 8%-12%? Is that a matter of months, or is that going to take longer? Thirdly, I appreciate that visibility must be very, very low at present, but if you could comment on perhaps October advertising trends across the Classified business and the News Media business, that would be super helpful. Many thanks indeed.
Yeah. Why don't I do the advertising, and you can do the margins? yeah, like I said, October, it looks pretty much like it did in September, and that means that continued improvement for most verticals. Jobs a bit more so than motor, relatively speaking. In terms of advertising, we see continued recovery in the Norwegian market. Swedish market is a bit more difficult, but we continue to see that we are doing well on the FMCG advertisers. this is partly due to the market, but it's also due to our own work and how we have built strong content verticals catering to those advertisers in our Swedish brands, especially Aftonbladet. Maybe you could do the
The first question, Adrien, on the margin, it's correct that we improved slightly the guidance for FINN for the full year. Like you said, from 40% to 45% , now to 45% for the full year. Of course, it also depends a little on the top-line development, but based on the current trends which we've seen in the third quarter, end of October, we're confident with that target. When it comes to the top-line development, 8%-12% is still the target, which we confirmed again today. How fast people come back to the growth rate is to be seen. I think short-term we will still be affected by COVID, and especially the job verticals, like we've shown today in our KPIs, are still impacted. Also when it comes to FINN, the travel vertical is really a driver for the current revenue decline.
like Kristin said, it just accounts for 5%-6% of total revenues in FINN in 2019. as the revenues declined by 70% in Q3, that should be a big drag currently, which dilutes the numbers.
Thanks very much.
Thank you. We will now take our next question from Lisa Yang from Goldman Sachs. Please go ahead.
Good morning. Thanks for taking my question. The first one is on News Media. You're raising your cost-saving target for H2 to NOK 140 million now. Could you maybe specify how much was done in Q3? Was there any temporary versus savings in Q3 as well, which could come back in Q4? That's the first question. The second one is on Sweden. The margin in Q3 held up much better than expected. I think previously you said the full year margin will be below the H1 margin at around 42%. I haven't seen that in the release today. I'm just wondering how you're thinking about margin for the full year. Basically, did you expect margin to be a bit better than what you previously expected? The third question is on Norway. I think you mentioned margin was impacted by ramp of investments in Q3.
Could you maybe specify what was the nature of this investment? Is that related to new product rollouts? If that's the case, when should we expect to just see the benefit? The very last one, if I can, just on Oikotie, that was down 11% in Q3, and I understand you were just starting to integrate the business. Given everything you said on job listings and real estate listings improving in September, and I guess as you further integrate the business and roll out new products, how should we think about the potential improvement, that performance into Q4? Thank you.
Okay, I can maybe start with the news program, and you can do some of the rest. Yeah, the cost program, we managed to take out, let me see, I have it here, NOK 30 million in the second quarter, NOK 50 million in the third quarter, and we believe we will be able to realize NOK 60 million in the fourth quarter. That adds up to the NOK 140 million for this year. When it comes to FINN and investments, first of all, we cut back a lot when we had the COVID situation in March and April. We froze new hirings, and we stopped some consultancy contracts, et cetera. Some of what you see is just picking up normal activity. At the same time, I have to say that FINN has some very good and ambitious strategic plans, among others, for the move to more transactional services.
part of the cost ramp-up also has to do with those new investments. A combination of just getting back to normal levels and investing in new activities. Do you want to do Sweden margins at least?
Yeah, what we can say, what we said for Nordic Marketplaces, you should overall expect a lower margin in the fourth quarter in comparison to the third quarter, because top line is lower normally in the fourth quarter, while spending, for example, as marketing and such, will continue. Like Kristin also said, we ramped up investments here to focus on a long-term ambition for growth. We are not specific on Blocket for the margin for Q4, but I think what you saw for last year could be an okay ballpark for the fourth quarter.
Oikotie.
When it comes to Oikotie, the development, like you said, 11% down in the third quarter. Look at the listings which we showed for jobs and for real estate. You see two different developments. Jobs was still significantly impacted in the third quarter, while real estate was going well. Of course, advertising, which was maybe 30% roughly of the revenues in Oikotie, is of course also impacted by COVID. It explains a little bit why the top line is down in the third quarter. Going forward, like Kristin said, in October, trends are overall rather similar, but we saw in FINN that jobs actually is a bit weaker than we saw in Q3. I think based on the current trends, maybe September is a good estimate to assume for Q4.
Okay, great. Thank you very much. Very helpful.
Thank you. Our next question comes from Eirik Rafdal from Carnegie. Please go ahead.
Hi, guys. Congrats on a good quarter and thanks for taking my questions. A lot of them have been covered, but I just have a couple on News Media . One thing which we really haven't discussed a lot is the churn, and then particularly on the digital subscription side, I assume a lot of consumers jumped on those subscriptions during the spring. Could you just talk a bit about how that churn has developed over the summer and through Q3? Also a question on News Media . If you could pinpoint how much of the OpEx reduction that came from variable costs that we maybe should expect to revert to more normal levels as soon as the world normalizes post-COVID. That would be great.
I can take maybe the first one on the churn. Overall, you saw the revenue growth for digital subscription was still performing well in the third quarter. We said also we expect that trend has continued and will continue in the fourth quarter. The growth, like we stated, is driven by volume. We get new subscribers. We see high interest for our high-quality products. Churn has so far not really changed that since the beginning of COVID. No major change here.
the variable cost, who wants to go?
I can just sort of short comment on that one. On the variable cost in News Media , I think as Kristin said, we have been quite specific on those parts of the cost reductions that are related to the cost program. Meaning the remaining part of the reduction is the variable ones. Looking into 2021 and going forward, I think as we have said, we expect slightly better margin in News Media than we have said before. Very much driven by the overall cost program. Also in News Media , I think you will see that we will have, as I said, some increase in cost again when people are coming back to the office. Being very specific on the split between the variable and the fixed beyond that is difficult to give.
Just to comment on from my side on News Media in the third quarter, I think we stated that we also got government grants in Sweden of roughly SEK 15 million-SEK 16 million. That is also an impact in the third quarter. That is mainly related that print is heavily impacted in Sweden. We have signaled that maybe a similar range could also come in Q4, but we can't be specific yet.
That's very helpful. Thank you.
Thank you. We'll now take our next question from Marcus Diebel from JP Morgan. Please go ahead.
Hi. Kristin, just one question left, which is again on News Media. Given the trends that you see on the top line in the print business, the migration to online really continues. Where are we on the editorial there? Do you think that the current base in the editorial is high, is at the right level also for online only? How can we think really about the trends given the strong cost savings that you had over the next three years, when the migration from print to online continues in terms of the cost base here? Do you think that there are further cuts really necessary or do you think this business with a high share of online can deal with the current cost base, if that makes sense?
Yeah. I think I understood the question a bit. The sound was a bit bad again. I think, first of all, our editorial newsrooms operate in a very integrated basis. It's not like you have some journalists working on print and others working on digital. This is very much one operation. In terms of editorial staff, it's not like someone will sort of fall away if you reduce the print activity. That's not how that works. Of course, there are costs related to print like printing and distribution, which is a more major part of it. When it comes to the overall cost situation in media, I would say now that the cost control is very good.
We take out a lot of synergies, both in terms of capabilities and efficiency when we have organized our advertising as one joint operation, consumer business catering to the readership market in one operation, product and tech is jointly run, et cetera. I believe that with the 500 that we're doing now, and which I'm impressed at how smoothly they are able to execute, I hope that we will not have to do further huge cost-cutting programs for a good while because I believe that we need to boost revenues. I believe there's a huge potential in our big digital footprint and that we can grow our subscription business and increase the commercial footprint of revenue generation based on that. That's my hope for the future, at least for now.
Yeah. I was asked exactly this. Do you think that if we talk about an online-only business maybe at some point, and obviously you need to keep the quality of the editorial, that you can run this business without the revenues from print? You answered it in this context. Okay
Yeah, just on that specifically. It's a very clearly expressed goal for us to be what we call digitally sustainable, meaning that we shall carry our cost base on the digital revenues only. We're not quite there yet, but we are moving towards that target. We originally wanted to be digitally sustainable by the end of next year, 2021. Let's see if we are still able to achieve that with everything that's happening with COVID, but that was our original goal. We're not that far away from being in such a state as you describe. It will be a good thing for us, too. That doesn't mean we will cut paper, but it means we won't depend upon it for our financial sustainability.
Perfect. Okay. Thank you.
Thank you. We will now take our next question from Ole Martin Westgaard from DNB Markets. Please go ahead. Ole, please go ahead. Your line is open. Please make sure you're not on mute. Mr. Westgaard, your line is open.
Can you hear me now?
Yeah, we hear you.
Yeah.
Can you hear me now?
Yes.
Yes, we can hear you, Ole.
You can. Okay, perfect. Congratulations on a good result. A quick question on FINN from me. You hiked your guidance to 45% for the full year. still, if you take your results for the first nine months, you have an EBITDA margin of 48%, and implied, if you assume flat revenues for Q4, you should have a drop in margin more than 10 percentage points, which looks very weak compared to your comments. I understand that there is some increased costs coming in, but still, it looks very cautious. Can you give any comments on how would you think about that?
If you look back in 2018 and 2019, I think then you can normally see that Q4 dropped by 7 or 8 percentage points doing from Q3 to Q4. If you highlight, for example, that you estimate a drop of 10%, that's a bit higher, but not completely off looking at the past. That is mainly driven by a slower or low revenue development normally in the fourth quarter. Like Kristin said, as we had like, let's say, temporary savings or we had low activity in the second and third quarter, we ramped up investments here and there are maybe a bit more ambitious here on that in the fourth quarter to make sure that we have a good momentum coming into next year.
I think also like we highlighted in the outlook statement, of course, the margin also depends a lot on the top-line development and especially how the job market will develop in the fourth quarter and partly maybe also then real estate, which has a very good trend in Q3 and also so far going into October.
Yeah. on the revenue trend you've seen so far in October, has that worse than what you saw in the last part of September?
No, I think like Kristin said, overall, it's pretty much in line in Norway. We saw that jobs is maybe a bit better actually than we've seen in September. Real estate is roughly in line, but when it comes to motor, it's a bit weaker, and here the thing is that inventory is starting to be a shortage for the dealers, impacting the listings. also, as there is not so much inventory and the demand is good, they're not so dependent to buy the upsell products to have more visibility on our platform, and that is impacting motor short-term, currently at least.
my question on the cost level there. The cost you are now going to have more of in Q4, is those of a temporary nature or is that increasing the base going into 2021 as well?
Well, as I said, some of it is just we're ramping back to normal levels, and then we do have some investment programs that we are initiating now, for example, on developing new transactional products, et cetera.
one thing to highlight for FINN, for the cost base is also Nettbil is also included, basically since January this year, is also having impact on the top line, but also on the bottom line here.
Okay. Thank you so much.
Thank you. We have no further questions. I would like to turn the call back to the speakers for any additional or closing remarks.
Oh, I guess we just then want to thank you for your interest and for listening, and thank you.
Of course, if you'd like further questions, please reach out to me or Malin and the IR team.