I would like to welcome all of you to a press conference where we will go, more through the information that we released this morning at 10 o'clock about the changes going on in Schibsted. Where, as you can see here, our goal is to build two growth companies, one with a leading Nordic, focus and one building on our online classifieds. The today's speaker is myself. My name is Ole Jacob Sunde, and I'm the Chairman of the Board of Schibsted. With me, I have, I almost say as usual, Rolv Erik Ryssdal, the CEO, and the CFO, Trond Berger. We'll go through first a brief presentation, and then we will open for questions. This slide is quite busy, and I will not, I can tell you, go through all the details in this slide.
It is meant to give a little background on the innovation, disruption and growth that has happened at Schibsted over the last 10 to 15 years. We made a clear and defined decision that we wanted to use the cash flow from our publishing assets and start to invest in online classified marketplaces. Today, it is easy to say that this has been quite a successful investment. It was not obvious at the time, we have now decided that it's time to move on. What we would like to do today is to present to you the reasoning why we now think that the next step will be to branch out and spin off our online classified media operations in a listed company and then refocus the operations that is in Schibsted, which will then consist of our operations in Norway, Sweden, and Finland.
From my perspective, actually, what we're doing is that we are creating two new growth companies focusing on consumer services. The one which is the digital company that will have its footprints in Scandinavia and consist of FINN, Blocket and Tori, the publishing, Lendo, and other personal finance assets, as well as other consumer service companies that we have here. We will be a long-term, active and significant shareholder of the new company, which is currently called MPI. We will find another name. Don't worry. I will continue as chairman of that company as long as the shareholders will elect me on the General Assembly. We have just announced that the new CEO of this company will be Kristin Skogen Lund. I'll come back to that in a moment. Trond will continue as the CFO.
Of course, this will be an important company. As you have seen from the documentation that was sent out early this morning, we'll have a turnover of just short of NOK 13 billion and an EBITDA of NOK 2.2 billion. The new company, which you can see here on the right side of this slide, will be a pure-play global leader in online classified. As a matter of fact, I think this will be the biggest pure-play company in whole of Europe. It's an important company. It will consist of all the Schibsted marketplace assets outside the Nordics, and Rolv Erik will go more into detail about those companies. We have, because we want to move forward with speed and agility, already appointed an active chair of the interim board. It's Orla Noonan.
Many of you that has followed us for some time will know that she has been a board member of Schibsted for the past two years, and she will continue her board membership at Schibsted. At the same time, she will take on as the acting chair. I think it's fair to say that when Kristin Skogen Lund is on board, which will happen on the 1st of December, she would probably consider to take over as the Chairman for the MPI. We have a very, very good and strong candidate in Orla also. As you know by now, the new CEO will be Antoine Jouteau. The intention is to list this separately in the 1st half of 2019, probably the Q2 .
This also will be an impressive company, a little small in turnover and also in EBITDA, but with a much stronger growth rate, as I'm sure that you are very well aware of. Let me use a little time to present our new CEO. I can tell you that I'm both very happy and also proud that Kristin Skogen Lund has accepted to become the new CEO of Schibsted. I think she's just the right leader for Schibsted in the next phase of our development. She has the right mix of experience and talents. As you, many of you know, she has worked for Schibsted for 12 years. She left in 2010 to become the Secretary Vice President of Telenor, with responsibilities for the Nordic operations of Telenor.
It's a company of a turnover of about EUR 6 million. It's a large company. She also was instrumental in the initiation of the digital transition in Telenor, building up the digital services. Currently, she holds the position as director general for the Confederation of Norwegian Enterprises. She has been a skillful and prominent leader of that organization. She will, as I told you, enter the position at Schibsted on first of December. Since we are now in Sweden, I can also tell you that Kristin was a board member at Ericsson. Yeah, I should add, even though that's evident, the large technology company that you have here in Sweden. She's also well known in the in Sweden as well as in Europe in general.
I can tell you that she speaks French and Spanish in addition to English. What we thought we would do now is that we'll move on and talk a little bit about the strategic rationale, and then I'll leave the word to Antoine Jouteau, and we'll come back, and I'll host the Q&A session afterwards. Thank you very much.
Thank you very much, Jacob. I think this is a big and important day for Schibsted. A new chapter is starting on our long and interesting journey. It's a happy day. I'm happy to talk about the two companies. I think they're both two exciting companies positioned for growth. If you start by Schibsted, I see that as a clear Nordic digital growth company with very strong control when it comes to reaching consumers in Norway and Sweden, partly in Finland. Remember, around 80% of the population in Norway and Sweden have a touch with Schibsted every week. That puts us in a position that is only rivaled by Google and Facebook are approximately the same level.
With this strong combination of differences, that puts us in a position to leverage the data across all our different sites and make the best possible solutions for consumers and tailor good products for the professionals. Schibsted has a history starting new businesses, incubating new businesses. If you look back at our history, because when we 25, 26 years ago and became a listed company, this is actually a holding company for two Norwegian newspapers. If you look at our journey since that, it's been remarkable, and we have invested in many different things. We have also internationalized. I think, if you look at what we created within internationalization of the past years, we were pioneer in developing that industry, but we also started other businesses and helped others.
Vend is one such example that I'll get back to in a minute. Here are the four clusters. You're familiar with the publishing positions of Schibsted in Norway, of course, with these strong brands and these strong brands you have here in Sweden. We have a leading position with these companies. You can see that although, of course, paper editions are going down, all our units are actually handled this transformation very well. The digital subscriptions are growing for our subscription and newspapers. You can see that VG and Aftenposten are at the forefront, and are the kind of considered the lighthouse in their respective countries. Let me talk about the classifieds portfolio here. Let's first spend a little time on FINN.
FINN has been the original, the start in our classifieds journey. It started back in the year 2000. Only a few years later, they have most of the houses, most of the cars in Norway on their site. Some people might think that FINN is a mature or established business. I would say the opposite. FINN is a growth company. If you notice with the their last quarterly results, they had top line growth of 16%, and they have set themselves clear growth ambition, both by developing new products and also branching into adjacent industries. For instance, FINN is experimenting with e-commerce and has done very well in travel, for instance. I think market has a lot of potential and is bouncing back now.
I think Tori has a good starting point. Then we have what we call growth, and we have the personal finance, which is emerging as a very strong cluster for us. I'll explain a little bit more about that in a minute. Then we have other growth initiatives, such as the price comparison site, Prisjakt. We're doing a lot of interesting things with our distribution unit, and we have Omni and a few other interesting growth companies. In totality, you can see that with our portfolio of strong brands, we have a huge footprint in the Scandinavian market. I think that will enable us to continue both to develop existing businesses, but also to be a helpful integrator for new businesses that want to grow first in Scandinavia and later then, outside of Scandinavia.
Let me use little time on personal finance because we see that personal finance is an area that is being digitized rapidly, we're very happy with our position. Lendo was first launched here in Sweden later on in Norway and in Finland. We're today announcing new launches are planned in Denmark this year also Austria and Poland coming within the next 12 months. This is, of course, because Lendo has a concept to digitize that we see is very successful in the markets we try it. We've done market studies of what could be good market entrants here, we can roll out this market share. These are not huge investments connected to this, still can open up very interesting positions.
In addition to that, we are doing also other things in the personal finance field. Let me mention a few things. We're the biggest owner in Tink, which is the mobile first lender here in Sweden. Same entrepreneur that started Lendo, actually. We've entered into Hypoteket, which is an innovative mortgage play, which is also a joint venture with the founders. Interesting field for us. I believe we can grow more in this area. Let me talk about what has only been working name so far. MPI doesn't sound too exciting. We have a name contest out there now, Marketplaces International will find suitable name well before the planned introduction on the stock exchange, which I believe will happen in Q2 next year. I think this is a uniquely positioned company.
Here you can see the size of it, and many of you are familiar with the with the positions. You can see that Europe is the main footprint, then we also have interesting position in selected emerging markets. Of course, if you look at the portfolio, Leboncoin is of course the biggest company. Spain is an important country for us, growing rapidly. We have very interesting position in markets like Austria, Italy, Ireland, Hungary. Then again, also a number of companies in the earlier phase. We have an interesting footprint in Latin America. I think especially OLX in Brazil is worth noting, where we own 50%. That company is showing a very promising development.
I believe that, by doing this separation, we can achieve even more speed and focus for this company. Speed is important in our industry when it comes to developing the products, when it comes to execution. It's, I just talked to the MPI people who are here, and it's a great excitement there. It's a clear strategy of continued focus on product development, deepening vertical roots. That means developing products for professional customers, real estate brokers, car dealers, recruiters. That will give them better views and make their jobs and lives easier. In addition to that, we're also watching what's happening on the New Model side and have a special crew looking into that.
Of course, we're taking out some synergies with the technology conversions in selected areas across the sites. I think it's good for this company. That will be a simplified governance structure that both will be a listed company, but also have a strong long-term owner in Schibsted. I think I'll leave it at that and hand over to you, Trond, to go through more of the process.
Thank you, Rolv Erik. The structure of the MPI shares, and the IPO will take place in the first half of 2019. It will be a spin-off, and it will take place as a demerger, and that is due to that's the most tax-efficient way for shareholders in Norway. Of course, we will remain with the majority ownership by Schibsted, as stated in the announcement. It's also important to have sufficient free flow so that it's liquidity in the new shares. We will inherit the dual-class shares A and B as a part of the spin-off. As we have said, we will then support that it will collapse into a wrong share class structure going forward.
This also implies that we will have a simplified governance structure. There is no ownership or voting limitations in MPI. The ownership share and listing venue will be decided at a later stage. We are also getting questions from investors and analysts. Will you sell shares? Will you distribute shares? What will happen? What I can say is that we don't have any plans for any raising of new equity in the MPI. Currently, Schibsted has more limited net debt, as such, and we will do this the most efficient way. It will be mainly through distribution of shares. Then we will repeat if we also would like or think it's right to have some small sale of shares. That we will certainly come back to.
You see here the timeline, it will be an EGM in the beginning of 2019. We will of course then also deliver the yearly result. After that, sometime it will be an EGM. Then there will be a two months credit period, and it will be likely listed then sometime in Q2 next year. As Schibsted will then continue as an active owner and then maintain a significant ownership in MPI. Schibsted will be an active owner. We also would have continued cooperation with MPI and Schibsted. We need to share best practice. It will also be some joint technology that could be supplied both ways.
Also, we have support from the Tinius Trust, and for the board decision to then do this spin-off. They have said that they will continue as long-term owner in Schibsted as before, but also that they would like to be continuous long-term financial owner in the MPI. If you look at the financial figures, publishing has shown a stable development. The good thing about publishing is that we have seen a strong step in the digital subscription. We are very satisfied with what we have achieved in the publishing over the last three years. Looking then at FINN, Blocket and Tori that will be a part of Schibsted. You also see there that we have strong growth.
The growth has been hampered somewhat by Blocket, due to some weak display in Sweden. The underlying growth rate in the vertical is somewhat flattish on Blocket. FINN has a growth of 70%, Q2 2018 against Q2 2017. They are both positioned well for growth going forward. Tori shows underlying good growth. We have the growth part, which is a consist of first of all, Vend is the biggest part, also has a growth in the Q2 this year, about 26%. We, as Rolv Erik, explained, have also plans to do expansion into selected European countries. It's a big company, well-positioned for further growth in the Nordics. Again, MPI certainly has a strong growth rate. France had also 21% in Q2 this year.
We are of course, very happy to see that the underlying vertical revenue is doing quite strongly in France. Spain continued to do well, also other developed markets, we see good growth rate. Also Brazil, continue, of course, with a very strong growth rate, and went into break even end of last year. Great positions as well. Rolv Erik , we have the key takeaways. Would you like to take them?
Yes, sure.
We believe that this strategic change is very good for the company and for all stakeholders. We believe we can best serve our customers, develop new products, and also create value for our shareholders. If you look at the two companies, I believe there are two companies that are in very good position for further growth. Schibsted has an interesting mix of businesses, strong people in Scandinavia that can develop and launch new businesses in addition to developing the existing ones. I think for Marketplaces International, they will be a fast-growing leader in the online classifieds market, being able to execute even faster and also look at interesting opportunities in the markets when it comes to teaming up with others.
I believe this company will have the firepower to also play, be a leader in any consolidation. All in all, I think this is a very good day for Schibsted. I think it's good and important clarification that will position us with two strong companies that will be allowed to move even faster and better. I think I'll leave it at that, and then the chairman will host the Q&A conference.
Okay. A question, yes. Can you turn off this, Lena, please?
Yeah, I have two questions. My name is . The first question is regarding stock at the Swedish and Nordic stock business. Where will that be located? The other question is regarding, you mentioned the central product and tech development, and that you aim to run dual track, so to speak. How do you intend to take care of the intellectual property rights? I mean, you sort of take the product and tech intellectual property when you separate, and then each entity can develop on their own. What is that?
Yeah, sure.
Thank you.
The last question is on what listing venues are you currently considering for the new companies?
You are the closest to answer most of those questions.
I will do my best.
I think when it comes to stock and also other products, of course there'll be a number of agreements between the new company and the company and Schibsted. I think Schibsted will continue to work together, and there'll be a lot of best practice sharing. In terms of new technology being developed and used in the other company, we'll have licensing agreements in place. I think we'll be able to take care of those. When it comes to the listing venue, we're looking at different options there, and we will conclude on that during the fall. There are a number of perspectives we're looking at there. Obviously, one alternative will continue to be an offer.
Another will be to take one of the big market changes in Europe. We are yet to conclude on that.
Just to clarify, stock, Sweden and Norway, will it be located in Schibsted or in the new co?
Stock is in the new company. I think it's fair that they don't have a license agreement in Norway and Sweden. Do you think that's fair?
I think we leave it as it is in Norway and Sweden.
Basically in MPI. Yeah.
Close this up with your good noise. Okay.
We are good friends, so we can do that.
Any other questions from?
We can take a few questions from the web, if they're no in the room now.
You're going to phone on?
Yes.
Okay.
Right. Can you elaborate a little bit on the decision process? Why did you choose to do this, at this very moment, at this point of time? That's one. What, how are you considering to leverage the new group? Will you maintain it unlevered or how will you distribute the group's debt? How will you allocate headquarter cost among the two groups?
Maybe I should start on the first one, talking about the timing. Our timing for a decision is always up for discussion. I think that today, we have great opportunities that we would like to leverage in both the MPI and in the Schibsted company. It's a decision that's matured over some months now, and I feel very confident that now is a good decision to move forward. When it comes to the leverage on the-
Yeah, first of all, just to remind you that we have a little less than 1x EBITDA in net debt versus Schibsted debt currently. We are, of course, a sound financial company. There is no plan, as I said, to raise equity as a part of the new MPI obviously. What will be the most efficient way to distribute and potential limited sell down of shares in in in Schibsted by doing this spin-off we have to come back to. This leads to, I would say that we will have limited, of course, debt also going forward. And we will have to come back how to allocate the debt between Schibsted and MPI.
MPI will be, if you look at their productions, of course, is in a strong growth position. Also we believe that Schibsted is well positioned for further growth in the Nordics. It will be two good financial companies, and we will conduct the financial targets in due course. Then when it comes to the question about the split of technology or Provider Tech, clearly we need to split Provider Tech as a part of this spin-off. There will still be some cooperation, of course. Meaning that there will be some Provider Tech that will be at MPI and that will be at Schibsted. That split and allocation and the percentage we have to conduct to.
It's right to say that currently, there is a majority on the MPI, but not such majority, I would say.
Okay, let's do a couple more. If an attractive offer is made by a third party, would you consider selling a stake in MPI rather than going down the IP-IPO route?
May I answer that? I can say that Schibsted is doing this move because we would like to invest further in the marketplace business, not because we wanna sell out. We see great potential in the marketplace. However, we think that this potential is best released by letting the international marketplaces operate under a separate entity. Because then it has more freedom to maneuver in the European and Latin American market. We will do the IPO, and that's our main course. I do think that Schibsted has proven to be a successful and good owner of a marketplace business.
All right. There's another question here which is there a good reason to keep the A and B structure on the Schibsted level after this?
Well, I mean, we have, article of associations, which is certainly, as planned, is to remain that unchanged, and the reason maybe is being structured. That's the plan to continue with that, yes.
I would rephrase that question because I think that is there any reason for taking it away? I think that we have proven so far that this structure is working well. It's generated a fabulous return, to the investors. Why should we take it away?
All right. There's a few people who are asking about Lendo. Can you say a little bit more about the investment plans there and how what kind of levels we should expect for investments in the new markets here?
We're starting out in these new markets, and not the biggest markets, but we're starting in Austria and then Poland. This is after we've done this search of many countries. Believe there are market openings right there. This will be done in a kind of a sequential way that is not the most capital intensive. I don't think some of you will expect figures, but it will not be huge NOK sum in the Schibsted perspective.
It will be stepwise manageable investments in these different markets as well. Yeah, I have to come back also to some more details on that.
If I could add that the whole reasoning behind the changes that we announced today is that we intend to build two strong growth companies with, if I may say so, two strong leaders. Both of those companies will have a strong balance sheet with a strong cash flow. That puts both companies in the position to seek out and invest in growth opportunities. That goes for the MPI, but that also goes for Schibsted. I'm saying that in relationship to the Lendo, that Lendo is proven to be a very interesting concept in personal finance. Why shouldn't we go for that opportunity?
All right. There's one on the ownership situation going forward. You have indicated that you plan to have a majority, Schibsted will have a majority in MPI. Does this include the shares held by the Tinius Trust, or will that come on top of it?
Well, I look it from the Schibsted standpoint, Schibsted board, and from that perspective, it will be a majority. That's what we mean by majority.
I guess it's correct to add, as you mentioned before, Trond, that the Schibsted position is one thing. When it comes to the Trust, the Trust has signaled that this is a financial investment, it is a long-term investment.
Right. One more here. On the strategy. You have said today that technology convergence across sites in MPI is a strategic priority, and yet you aborted the platform of the Rocket project. How do you reconcile these two things? Can you elaborate a little bit on that?
In technology in general, you need to experiment with things.
We have made a good effort to look at Rocket with the replacement. Then we when running it and testing it for a while, we found out that the risk connected to that was too high, and that it would be better to go with the potential model. We will continue to develop common components. We've done that successfully with messaging, notification. We're doing it now with dashboard, the price comparison types, tools, et cetera. We'll continue on a component basis. I think the database structure is something we're looking into. I think it's important when you're running a company like this to be able to experiment, test out new things. You find out what works and what doesn't work. Is it too ambitious or not?
I think this was a sound decision based on the experience that we had so far.
I think also it's fair to say that it is, a lot of learning that we have taken with us from the Rocket. So it's not that, we have done investment in Rocket and based business in Rocket. That investment you will see in many, for instance, of the mobile applications that we have today, where we've taken with us the technology and the knowledge built up through the Rocket project.
Okay. Can you say anything about your M&A strategy for MPI, and how much may Schibsted reduce its stake through any M&A?
On the M&A strategy, what we're looking to expand our footprint. Schibsted has for the last 15 years grown as a combination of organic growth and M&A. We think that we're primarily looking to expand our footprint where we already are present. That means mainly Europe and a few selected markets. If we find businesses there that fits well together with our portfolio, we are interested in those. When it comes to the, when it comes to dilution effect, Simon, I don't know what is.
What we are saying is that MPI is a very efficient growth company. Of course, we'd like to take part of future growth and opportunities when it comes to growing and also looking at M&A possibilities in that respect.
I can add from the board perspective that we're doing this because we want to seek out those growth opportunities. The decision will then lie in the Schibsted board. It's up to the Schibsted board to consider the opportunities and make the decision as to how we're going to move forward with possible M&A opportunities. All that Schibsted has said is that it will remain a significant, active, and long-term shareholder.
Are you able to, communicate any updated growth targets for MPI in relation to the 15%-20% that you're communicating for the, online classifieds previously? Are there any specific things you can say about the growth profile of Schibsted itself?
I think that, as for now, I think the 15%-20% is a good guidance also for the, for the MPI. I believe we'll have to come back with, more specific, figures for Schibsted also.
When you talk about expanding the footprint in Europe, do you mean new countries or new verticals in existing countries?
Well, I'm trying to say both, could be both. We are always looking to expand the footprint in countries where we already are, just as we've been doing now gradually in France for instance. I think also, similar businesses in other European countries could also be interesting.
I think that's it for now from the web. Are there any more questions in the room? If not, we're ready to take questions from the conference call on the phone. Please, operator, go ahead.
If you'd like to ask a question at this time over the phone, please do so by pressing star one on your telephone keypad now. We'll just pause for a moment to allow your signal to reach our equipment. We will now take our first question from Lisa Yang from Goldman Sachs. Please go ahead. Your line is open.
Hi, good afternoon. Just two quick questions. One regarding your JV with Naspers in Brazil. I'm just wondering, you know, ahead of the IPO, the spin-off, I mean, do you expect anything to happen to the ownership? I mean, does Naspers have the option to exit, for instance? The second one is regarding the split of MPI. Does that, you know, result in any potential dis-synergy? Thanks.
Question. This does not affect our business in Brazil. We expect to continue in a good relationship with Naspers. That works very well. The second question.
Wait. It was about FinTech. My understanding is the question was, as well, that Finland Rocket will remain in Schibsted. It will be a cooperation between MPI and the classifieds in Schibsted. We do see limited dis-synergies as a part of this. It will work efficiently going forward as well.
We'll be able to share, best managers, best practices, and technology could also be licensed because of it.
At this time, again, if you would like to ask a question, please press star one.
There are no further questions on the phone at this time.
Okay. I think your question on Trump will be also available for our investors.
That's right. I will say thank you to all of you for coming and joining us, both here present in Stockholm, but also over the phone and on the streaming. Thank you very much, and we'll see you soon. Thanks.