Good morning to everyone. Welcome to this presentation of the third quarter results for Schibsted. Trond and I will go through the presentation. The chairman is present and also some representatives for senior management. Go through the presentation and then do a Q&A. This is the agenda we'll take you through. First I'll talk about the highlights and then go through the operations. Then there is an update on the MPI and the de-merger, and then Trond will go through the financial part of it. The headlines, I would say that on the operations, there are no big surprises. We continue to deliver on the steady course for the marketplaces. It's the same pattern as earlier this year. The big assets, France, Spain, Norway, and Brazil continue to do well.
I'm especially pleased that they're doing well in the big verticals, continuing to increase their market positions. Soft quarter in Sweden, as we've seen earlier this year. However, there are some positive signs in Sweden. I'll get back to that quite soon. We're also announcing that we're refocusing the ambitions of SPAAC with more emphasis on reaching a break even at an earlier stage than what we have previously announced. For the publishing, it's important that the digital part continues to grow and the digital subscriptions all over the portfolio does well. I would say I'm especially impressed by VG and what they have achieved in this quarter. For the Schibsted Growth, there is a continued growth for Lendo, albeit at a somewhat slower pace. I'll get back to that.
Earlier this year. We're seeing a continued good potential in the other part of the Personal Finance portfolio. Those are the highlights. As I said, marketplaces, not any big surprises, but I would say a continued positive trend. You can see here on the top line it's a growth of 13%. I think for accumulated year, this year it's 14%-15%. You see that the big engines, I would say Norway, France, Spain, deliver. A little bit slower in Sweden. I also like to emphasize that it's a good development in total margins. Here, this is what we're emphasized also a few times earlier, that it's really the big verticals that is the important focus for our companies.
Here you can see that real estate and cars are the biggest and then jobs. To continue to work and deepen those vertical roots and work with the professional customers within these segments have been the priority and still is. Therefore, a bit slower growth on the display advertisement. That's a competitive market that we have not focused as much as the others. But we're looking at new products and initiatives there going forward. This is the development as I have expected. In France, good quarter for leboncoin, definitely. They continue to do well in the big verticals, so they are increasing their market share both in cars and real estate. The traffic continues to grow. Very good.
You know, we've done modifications, we've done messagings, et cetera, et cetera, and that helps drive the traffic growth. In, when it comes to the margin, we pointed out that earlier, that of course, leboncoin have done some acquisitions. The margin for total France is a bit lower than for leboncoin isolated. That's a natural thing. What I like is that it's a very vibrant site. Continues to develop all the time. Looking at new product development, one thing they will look into next year is, for instance, to do more on vacation homes. Same story with Finn, really. A very positive development. The revenue continue at to grow at a good pace. They're good at making product developments.
This year is especially jobs and real estate have done well. Of course, they're benefiting also then from a strong Norwegian economy, and that's especially for the jobs. Working to develop new products have rolled out the dashboards. I know that they're also looking now at what can be done in new verticals and some of the big real estate developers in Norway have really looked asked us what can you do in new construction. I think FINN.no is looking into that and will come up with some interesting products there during 2019. Spain. Good development. Continue the good growth.
I think that's what's really growing fast in Spain is the car part of the business, I believe that the car part in Spain, that car market developed the total market size, that there is good room to continue to develop that. Of course, we are by far the leader in that market. This is a market that I'm optimistic on also in medium to long term. I think also the other verticals in Spain are delivering well. InfoJobs, of course, and also on the real estate side. There has been a strong macroeconomic development in Spain the last few years. As you're well aware, I've seen now that some economists are downgrading their growth estimates.
That is, of course, something that we and others will have to pay attention to as others, especially in the job sector. It's a good development in Spain. I have talked about Blocket and Bytbil many times this year. What I can say is then that the jobs is continuing to do well now. I think we're now the leader in the job market, though, of course, not in the same situation as we are in some other big markets, but I think we can grow more there. In the car market, the positive thing there is that there has been slight revenue contraction. That's been a mix of what's happening in the private and professional cars.
What we are doing, really all we can there, is to develop the site and launch new products, and therefore have a good dialogue with the car dealers. I think that is a very constructive dialogue now, and certainly more than it better dialogue than it was last year. As a result of that, we're seeing that many of the car dealers that left Blocket to try out competitors, they are now returning to us, and we're very happy with that. We'll do our very best to continue to work with these dealers so that they'll be happy with the product. I think it's clear that Blocket is the strong marketplace that provides the most leads. Those are the big sites. Then let me turn the attention to the investment phase.
We have guided that we'll have total investment phase losses of NOK 40 million-NOK 50 million this year. Of course, we'll can confirm that will be in that range. Brazil is continuing to do well. You can say that with the announcements that we made around Shpock, of course, this will go significantly further down the total losses next year. The reason why they're going down is, of course, that many of these sites are also reaching maturity. Brazil is becoming a more important site in the totality of Schibsted, and you can see that they have a positive development. This is, of course, a market that is more of a emerging market compared to other markets that we operate in.
Therefore, it's also very exciting because we see the growth of OLX is doing very well and, of course, there's a lot of markets still to be converted to digital. If we are good at developing products, I think that there is, there is big growth opportunities in that market. What I'm seeing now especially is that cars are doing well, but also real estate picking up. As you know, we've said that, you know, you can see there is a positive result. There is low marketing spend this quarter. I will ask you to now not pay too much attention to exactly how the margins goes up and down in such a phase. I think, for instance, next quarter, they'll be spending more on marketing. That will, of course, affect the margins.
The important thing is that we're gaining those positions in the verticals and continue to grow that business. For Shpock, we're entering into a new phase. We've been the owner of Shpock for a number of years, and we have been able to establish strong market position, especially in the UK, also Austria, and partly Germany. What we're saying now that we're refocusing the strategy, there's a new management in place. What they've said is that it's important for us to go more towards the break even. And when I say break even during 2019, that's not for the full year, but a year from now, next fall, on a monthly basis, I think that is realistic.
That means that we're going to spend less money on marketing, focus more on product and monetization development further. All right. I think that is that's what I plan to say about classifieds. Of course, I will be happy to answer questions later on. Moving to publishing. I think if you look at this picture, it's actually, it's a remarkably stable picture overall. There's a lot of good product development going on in our on in our media division. If you look at the combined picture of VG and Aftenbladet, the figures are good. It's especially VG who's delivering extremely strong quarter. Aftenbladet somewhat slower, looking into actions that will improve their performance.
VG is impressive, and you can see also here that there's a strong growth in the digital subscriptions for VG. Aftenbladet is working on the same thing. We talked many times about the digital subscriptions in the subscription papers. Here you can also see that this is growing rapidly and they are, as you will see when you're on the front page of VG, continuously experimenting with what kind of new products can be charged for and what's the engagement for that. Here you can see also about the big subscription newspapers. It's the same trend that continues. Of course, they're working hard with the digital subscriptions. I think that we are quite advanced from that. There's a lot of learning.
Many people are coming to us to ask what we, how well we're working with digital subscriptions. There's a lot of learning being shared across the portfolio. Big focus of the management, of course, because this is a sustainable revenue source. We're working on not only getting people hooked, then you pay, then after a while they leave. To have that, it's important to have that continuous engagement. That's being followed up closely by the management there. I'd like to emphasize that again, that we are very proud of the journalistic mission that our journalists and editors are delivering on. I think both in Norway and Sweden, we are really at the forefront. There are some recent cases of big importance.
You see the big thing in Norway has been this revelation about the three brothers being kind of characterized as disabled without their own involvement, whereas the community then received more money, central funds from it. I think both in Norway and Sweden, you've seen some interesting cases about politicians overstating their expenses, leading to that they have to step down. Of course, in Sweden, there's a unusual political situation and Aftonbladet is following that very closely and being the lead of that. I think they had more than five million visitors the day after the election. All right. Let me go to Schibsted Growth relatively briefly. We have talked about Lendo and the further expansion there.
You can see there that the growth in Lendo, this, on a quarterly basis is a bit slower than what we've seen previously. Obviously, you know, we can, you can see that the growth last year was phenomenal. This is driven by a couple of factors, such as in Norway, there is a slowdown in the market due to regulatory measures. You know, finance department has stated that if you want to provide loans, so the lenders have to cannot do a long duration, they need to require more information, et cetera, et cetera, et cetera. But I think the important thing is that I don't see us losing any market share in any of those markets.
Lendo is a very good concept. That's why we said that we're going to launch it in three more markets relatively soon. I'm not allowed by the Lendo people to say where there is already a better launch. It's coming up quite soon. Poland, Denmark, and Austria will be launching. As I said, I think within the rest of the portfolio in Personal Finance, very healthy and interesting growth in companies like Bynk and Hypoteket. Okay. Before I hand over to Trond, let me just take some of the highlights. If there aren't any big news in Schibsted and the operational update, there was certainly some very big news last month on the 19th of December when we announced the demerger of the international marketplaces. Let me just run through that with you. This has been a debate going on in the company for some time, we landed on a solution which I think is very good because we'll create two strong companies. Schibsted will remain a very strong digital growth company in Norway, consumer-focused, clear synergies between our strong market positions within media, within classifieds, within growth, and the ambition to expand further. MPI, still a working name, I promise you I'll get back to you with a better name before the listing. Pure racehorse that can continue to grow and also take part of further structural changes in the industry. Here are, of course, some of the most important parts of this company.
You can see that in Schibsted, you have those strong brands and very good growth drivers in online classifieds and Personal Finance. Publishing activities, you know. Of course, there's a shift going on from print to online, but we have many very interesting online positions that are growing very well. I believe in the synergies here will give this company a unique position to continue to expand. I think marketplaces will then be able to focus even more and speed up product development and take part of the further industry consolidation and will be a very exciting company both to work for and also for our customers. The strong growth ambition. All right, I'll hand it over to you, Trond.
You can talk a little bit about more the news about how the listing will take place.
Thank you, Rolv Erik. We have some news when it comes to a listing venue, and that has been thoroughly studied, both with advisors and internally and looking, of course, at the flow or shares also after the spin-off. We see Oslo Stock Exchange as a good place to continue to be listed also with this MPI. There are also some technical tax aspect that has led us to this, gonna be confident that this is the right solution. It will be a listing on Oslo. Schibsted will have a strong shareholder base, of course, with Schibsted being a majority owner, as we said in September. Now, the board has concluded that we plan to retain a 60% ownership in MPI after the spin-off.
In that connection, we believe it's also right to sell down shares in order to create demand in the market and to attract also new investors. That's why we say that we plan to sell up to 5% from Schibsted in MPI as a part of this spin-off. There is no plan to raise equity in the new MPI. Both companies will be well-funded and a strong balance sheet, so in good position to continue a good growth story for both entities. We will just copy the A and B structure in Schibsted in the new MPI as a part of the listing, but there is plan to then collapse the A and B shares, so it will be a simple share structure and no particular then other elements in the Articles of Association.
Be a more standard type of setup as you see in most listed companies. That will be the case for the new MPI. The interim board has been announced, it's Orla Noonan sitting in Schibsted. She will be an interim chair. Terje Seljeseth, that many of you know, from the classifieds, we'll be happy that he will join the board. Also the head of Rightmove will go into the new MPI. It will be a strong entity with a lot of competence, and of course Rolv Erik will then be the head of that going forward. Into finance, just to explain then the bridge between last year and this year. We're happy that we continue to perform, and it's a solid quarter.
We do see that our main classifieds sites continue to deliver, and as Rolv Erik Ryssdal said, especially on the vertical side. I think there are a little bit mixed picture when it comes to advertising. There we still have some lower growth rate in some assets as a result of the advertising. That means display advertising, in both in the publishing and in the classified, which is, has some lower growth rate that you see in the underlying business itself. We are happy with the totality, and Norway continued to do very well. FINN.no is, I would say, impressed what they're able to continue to grow. Also in Sweden, the Blocket situation is actually stabilizing.
If you look at underlying performance in Blocket, it is close to flattish on the vertical, but again hampered by advertising. Spain continued to do well. We have also taken down investments, coming a little bit back to that. Publishing, somewhat weaker, first of all, in Sweden. There are some effect of course of the strategy to go for the ad market solution in Sweden, which has some negative effect, but we think is right strategically instead of joining a Google network, that could be a quick fix in Sweden. The growth is slightly lower, but that is due to I would say little bit slowdown in Lendo in Q3.
However, if you look at the October figure for Lendo, I think it's, we see a continuous good growth in Sweden. That's happy to see that. We think that will continue to do well. We also have slightly lower cost on the product and tech. We have then improved our EBITDA cash flow and also taken down the CapEx. We continue to strengthen our financial positions. If you look at the profit and loss, there is not much specific to comment upon there. We have an operating profit EBITDA of NOK 972 compared with NOK 903 last year. We see that the tax rate is somewhat lower in underlying, which is good.
There are plans for lowering tax rate, also nominal in some of the countries we're operating. You've seen in Norway continue to go down. Sweden is also on that path. France has said that they would like to lower the corporate tax rate. That's good. If we look at the guidance for Schibsted, we have said that we have a target of 15%-20% top line growth for the online classifieds, that we stick to that guidance over the next 3-5 years. We will focus on cash flow and profitability going forward. If you look at the online classified investments, we guided NOK 40-NOK 50.
We have taken down the range now to 40-45 as we are approaching the year-end. We expect the investment to continue to go down if you look into 2019. Publishing, again, just an update on the guidance to assist analysts and investors. Well, for a HQ and other, that will also go slightly down. We said flattish to slightly down. Now we say slightly down. Also CapEx, the same, slightly down. Improvement, I would say, in some of the guidance going forward, if you sum up this when it comes to then the financial position. I think that concludes the presentation from my side. Rolv Erik?
Yes, thank you. You can run up here with me and I will move into Q&A. Anyone in here? Well, I think Pavan in the middle of the room there, question? We're trying to get the microphone to Pavan.
Thank you. 2 questions. First on the classifieds or the marketplace.
Sure.
The other developed sites have only 10% growth, a bit behind your 15%-20% target medium term. Do you see any trend? Is there anything that you will do to sort of drive that growth further?
I think that we expect them to come back on their growth path and I'm also happy to see that they have a healthy margin development. I think long term they should be back up in the range that we've stipulated.
Turning over to Shpock, quite aggressive expecting break even throughout 2019. Could you be a bit more specific on how to monetize that product, and how to be able to get there?
Well, yeah, so it's let me stress that again. It's not for a full year. It's just for some months towards the end of the year. We need to work further on the monetization products with the cars in U.K. Also look at, you know, some premium options and advertising products that we can charge for. Is Henrietta here?
Yes. Henriette Trondsen, Arctic Securities. One more question about Shpock. That's Pavan. Can you be somewhat more specific on which countries you will cut the marketing spending, and if it still targets a position in cars in the U.K.?
Yes, we will continue to do that. I won't be too specific on the marketing reduction. Just say that we will, there'll be an overall reduction.
After the spin off of NPI and some more color of product and tech spending going forward into 2019.
I think that's No, I mean, we are just in the planning of that. Help us... I mean, we have some common resources, so we need to come back with a more specific guidance when it comes to the product and tech in both entities. That's one of the tasks that we're really digging into now. We would like to give a better guidance and come back to that.
One more question, if I may. On Brazil, OLX, the car segment remains strong from my stats, but on real estate, have you seen any changes after the merger between Subito and Vibbo?
No, we have not seen that. I think, you know, as in any merger, they have to kind of get their act together. We've actually seen a positive trend for ourselves in the real estate market.
Okay. Thank you.
Any more questions here in the room here? Yeah.
Fredrik Stene from Pareto Securities. Interesting to see you guiding towards breakeven on Shpock next year. Can you talk a little bit about the decision-making process for why you're doing and deciding on this refocusing on that strategy now?
Well, I think Shpock has had an exciting growth opportunity for a number of years. The general manager decided to retire some weeks back. There's a new guy coming in from has a background from Schibsted Spain. He is now working on a new strategy. He believes that, well, now we've grown a lot, now it's time to move through, more towards profitability.
Okay.
With the measures that I mentioned. This is, you know, an internal process in Shpock.
Okay. On Spain, you have a 17% growth year-over-year, fairly stable margins. Can you elaborate a bit on that development? Were there marketing spend in this quarter, or should this margin level be where?
I think what I've said about Spain earlier remains the same, that you shouldn't pay too much attention on the on quarter to quarter. The important thing for me is that Spain has a good growth potential and on top line, I think that that the margins then if you look in the medium perspective, will certainly then move north. It's not something that we're stressing now. I'm not expecting a big margin uplift for next year, for instance. You know, we're thinking long term here.
Thank you.
All right. If there are no more questions here, then let's turn it over to you, Christian.
Okay. We have quite a few questions coming from viewers on the web. Firstly, on Sweden, you mentioned that car dealers are coming back. Can you elaborate a little bit on why the revenue development was a bit poor in the quarter on that area, on Sweden in general?
Yeah. If you take the classified in Sweden, the underlying classified revenues is close to flattish. I would say slightly down, but not much.
Down.
Yeah. It is really hampered again by advertising in Sweden, first of all. I think 3%, 4% which is down on the cars, which is a mix of private and professional. When I said that they're coming back, we're happy with that. Of course, that takes a little time to translate into revenues.
Okay. You have ambitions for further M&A activity, of course, in the classifieds. Can you say anything about the markets there? Have you seen lower valuations in the private markets as a result of declines in the public market valuations? Specifically on Italy, what can you say about opportunities for consolidation there?
I think that we've said that we want to expand and look for new opportunities, and that we have a good set-up to do that. Mainly, we want to focus on the markets that we're already in, which means Europe and then selected emerging markets. That's kind of the baseline. I think to those specific questions, you know, we're looking into bolt-ons and to do more in markets that we're already in or adjacent markets. I don't want to comment specifically on individual markets. And what I can tell you is that, you know, on the pricing, et cetera, you know, that's a difficult question to answer.
I would say that generally it takes time from expectation from sellers to go down even if the stock market is a bit turbulent.
Thanks. We have a few questions coming in regarding Lendo. You had a bit of slowdown in the revenue growth there in the quarter. On this backdrop, can you elaborate a little bit more on your ambitions to expand into new markets? Can you say anything about the expected cost for the launch in these three markets that you have announced?
Well, let me say what I said earlier that we have not seen that we are losing market share. I think rather the opposite is what we're looking at. We believe that Lendo is a very healthy concept. We have scrutinized markets in Europe to launch in, and then we've kind of came up with these three where we believe there are interesting opportunities. Denmark, Poland, and Austria. You know, tighter regulations and other things in Scandinavia does not deter us for pursuing what we believe is the right business strategy. On the cost side, Trond, I don't know what.
No, that is still being also evaluated. As we have to come back to that, I don't expect any significant costs when it comes to Q4. First of all, the I would say that the performance has been hampered somewhat by the tightening of regulations in Norway. Sweden seems to come back again in October. The underlying trend, we expect to continue to do well in Lendo.
Okay. A few questions on the merger of NPI. Can you say a bit about You plan to sell down 5%. Can you say anything about what you will use that cash for? Also, secondly, can you rule out that you will sell part of your stake already ahead of the IPO to industrial players?
First of all, when it comes to the 5% comment on that, I mean, we of course will end up with a strong Schibsted and new NPI. That is a good basis for continued growth story for those two entities. We and the board is working on then revising the both the equity story of course, and also the financial targets. We will come back to the market in due course to be more specific on that issue.
That is of course something we're doing also to facilitate the listing. To your second question, I think the board has been quite firm that we're not running a dual track here. We're doing an IPO, and that's what we're working for.
Thank you. There was a note regarding a one-off in Mexico. Can you say anything about the nature of that and whether that's something that you should expect also further, things like that in Mexico?
No, no. Mexico has been some, fair to say, as small as it is, about EUR 2 million, a little bit more. That is a cleanup from some errors actually made two, three years ago that has now been detected. A lot of small items. Nothing to be concerned of going forward. Now it's in good shape going forward.
All right. Question on France. Can you please comment on what key metrics you're following when you refer to increased market shares in those verticals? Can you say anything about your ambitions for marketing push going forward? Secondly, on Norway, you mentioned a home development or new development product. Are you at all monetizing this currently?
On France, what I'm saying is that, you know, we're growing on revenues quicker than the market. Hence we're increasing our shares of our market shares in revenue. As you know, we have for a long time been the leader in traffic and volumes, and now we're also increasing it in revenue terms. You know, France is a healthy market, our competitors are growing as well. That's good. I see that we're growing at a somewhat higher pace, and that makes me satisfied. The question about new construction in Norway, this is a concept that FINN.no has been, you know, working with the big developers on. There it's more of a beta thing now to be launched next year, that's not something being monetized. All right.
Any more questions here? Otherwise, you know, there is also a telephone conference this afternoon. Of course, we're available. You know, just by wrapping up, let me just repeat the main parts from the operational side. Marketplaces, we deliver, continue to deliver on a steady course. No big surprises. France, Spain, and Norway and Brazil doing well. I think that Sweden, we have a plan for that. I talked about the Spark refocused ambitions. This will also lead to investment-led losses. Publishing is an overall stable development. Of course, things go up and down and, you know, they do that especially in the publishing business. But we continue to invest in digital. On the Schibsted Growth, yes, Lendo has a somewhat slower rate.
I don't see us losing market share. We're moving ahead with the launching in three new markets, and there are also other interesting parts of that portfolio. Thank you so much for attending. What I can tell you is that, you know, we'll be available of course during the day and the next few days to answer any questions you might have. There's a telephone conference also at 2:00 P.M. for those who want to attend. Thanks a lot for coming.