Right. Good morning, everyone, welcome to this Q2 presentation for Schibsted. With me in the room is Trond, who will give the financials, Sondre, head of our classifieds operations, of course the IR, Espen and Jo Christian. We'll keep this presentation relatively brief, but of course open up for Q&A. The headlines are the following. I would say this is an all-time high result for Schibsted, so a very good result. I would say that the report does not contain any big surprises. We're continuing on our steady course and our steady growth rate. If you look at marketplaces, revenues continue to grow, and there's also a positive profit development. Look at the big assets. France has a very good quarter.
FINN has also an excellent quarter. Spain and Brazil are also very positive. There's always focus on the margins. What I've told you many times is that the margins will vary from quarter to quarter. We point out, though, some specifics around France since a few of you are extremely interested in that one, let me get back to that. Investment phase losses are declining. We're on path or on track to deliver on the target that we've set, that the investment phase losses will be between EUR 40 million-EUR 50 million this year. For publishing, I would say that the picture is actually remarkably stable. Of course, the paper revenues continue to decline. On the other hand, digital revenue, especially in digital subscriptions, has a positive and a continued positive development.
For Schibsted Growth, it's also a positive development, with especially Lendo doing well and looking into new market opportunities. Let me start with the marketplaces. This is a slide that we showed you at the last presentation, kind of summarizes our ambition on classifieds. You can see that we've had for a long time had the target of 15%-20% annual growth, and we've delivered all that historically. Here we see the main building blocks. Given that we continue at that rate, then you'll see the revenue potential by the year 2022, which is between NOK 16 billion and NOK 19 billion or $2 billion. Here you see the main building blocks on the right-hand side.
The most important drivers of the revenues on the classified side are the main verticals. Of course, display and general list are nice contributors to the total revenue, but what's really driving the growth, I'm happy to say, are the three big and important verticals: so real estate, cars, and also jobs. Let me go through the various assets and start by France. I think we need to congratulate France on an excellent World Cup coming out on top. There's many things going right in France at the moment. This is the slide. Here you can see on the left-hand side, how it looked before the final, and also, they continue to with those proud colors on the sides.
You can see also that this was a big media thing all over the world, then also, of course, with a dramatic final, driving a lot of traffic and casual sales also in our Nordic regions. I think this will continue to the optimism that we've seen in France after Macron was elected, which of course also is good for the business community. Here you can see the development in France. A very good quarter again for Leboncoin. You can see that the revenues are developing very, very positively in the verticals, especially real estate, where we continue to do well and the bundle with A Vendre A Louer seems to be popular among the real estate agents.
It's also a good development in the real estate market in general in France. What I would also like to point out is the then the development, the positive continued development in traffic. That is important. I think this, we can safely say this is due to the continuous product development that is taking place in France. The app is of very good quality and continues to launching new features. They're also working on improving many functions on the site, such as the search function is easier to use now. Peer-to-peer payment in beta version, for instance. When it comes to the margin, we've said that before, that that will vary, will go up and down.
We can see that the underlying margin in Leboncoin is very good. Of course, marketing, it goes up and down. There is a lot of marketing this quarter. The assets that we acquire does not have the same margin as the core Leboncoin business. Moving over to FINN, also an excellent quarter by FINN. You can see a healthy growth on the, on the important verticals here. Jobs, real estate, and cars are all continuing to deliver positively. I have to point out, of course, since last time, I talked about Easter effect and there was lower growth. That is true. The Q2 is positively affected by the recovery, especially then in real estate and the cars after Easter.
Even if you look down on an aggregate basis, you'll see double-digit growth in FINN, which is very good. Remember, the Blink product that started in jobs has been very successful in the real estate market. We're continuing to push it now in jobs and also launching that product in cars. In Spain, there's a positive underlying development. We're seeing that Coches, the car vertical, is having a very healthy development. I think jobs is also has a good development, and we're seeing continuous improvement in the real estate sector. Well, the margin is affected positively by reduced marketing spend. I've said this before, this will vary and go up and down. This is a very good quarter.
If we spend some more money on marketing, the margins might come down somewhat. Important thing for me is that there is a good underlying product development and also a healthy development in the site. Sweden has been more of a challenge for us, and this has to do with several factors. What I'm happy to say is that jobs continue with a solid growth. I think we're taking a clear position in the job market, and they have good product development. They have a good growth between 15% and 20%. In Cars, I'd like to spend some time on that.
Cars is actually quite stable and good development. We're working hard there to launch new products to work with the car dealers. What we've seen is that the many of those car dealers that tried the competitor exclusively have now come back to us, and I think this is a sign that Blocket is really providing good leads. What we have to do is continuously work to make our product better. We have also spent more money here on marketing, as you've seen. We work continuously with the product. For instance, we have made the car insert, the ad insertions easier, with access to a database that will help car dealers with many of the facts about the cars they upload.
Disappointing in Sweden has been the continued decline in digital, sorry, in display ads. We're working to develop new forms of that, but that is the main explanation why the revenues have gone down. Okay, let me move on to the investment phase. Here you can see that we are on track to delivering in the range that we have explained earlier, between EUR 40 million and EUR 50 million. That is a natural thing, of course, as many of these sites reach breakeven. You can see also that Shpock has spent less money this quarter than what we've done previously. Otherwise, in Shpock, we're continuing especially with the push in the U.K. with boots on the ground, as we say.
That means salespeople out visiting car dealers, and getting them to advertise on Shpock. Then we'll convert that into payments later as we see that we provide leads. Brazil was a positive surprise in the last quarter, and I would say that they continue on a healthy path. A very good growth both in top line and in revenues. I think there that especially they're firming up even more their leading position in cars. You can see here that the number of car dealers, so the professional cars, really is. The lead is quite significant to the number two and the number three players.
We see that, for instance, finance companies, they want to sign up with us because this is leading car verticals. We're also making progress in the real estate sector. Of course not, we're not the number one player there, but we're making progress there. Also, I'd like to pay tribute to the team in Brazil because they work continuously on the product development. If you look at their products, for instance, the app is actually very good. That concludes, actually the classifieds part. Let me go on into to publishing. Here I would say that I would actually say that the development when it comes to numbers in revenues and margins is remarkably stable, if you look through what's going on in the industry.
Lots of good product development. Let me get back to that. You can see that, of course, paper and casual sales continue to decline. On the other hand, digital subscriptions have a positive trend. Let me show you that. You can see also now that, in, for VG and Aftonbladet still solid margins. Aftonbladet doing well in June due to the fantastic also effort by the Swedish team in the World Cup. We see here that VG is delivering also now well in digital subscriptions. For many of those who live in Norway, they see that VG+ is becoming increasingly popular. I, every time I go to a party, I receive good suggestions for what should be in there and what should not.
I have to direct that to the editorial department of VG. That's not my responsibility. This is showing a positive development. I know Aftonbladet is also experimenting with their payment service. For the subscription papers, it's also the same development, stable. Digital subscription numbers continue to increase with a good growth rate, I can see, 38%. That has been price development last year has been relatively stable. Price and volume, or the volume in revenues are relatively equal. I'm very happy to say that they, in all our media houses, they continue with active product development.
This was one feature which was quite funny, where VG had this, that you could find your World Cup twin. Here you can see that someone ran the test on me, I think it was Jo Christian. I only got a 42% match. On the other hand, I look quite similar than to the famous Wilfredo Caballero, which is the Argentinian goalkeeper also playing in Chelsea. I was quite happy with that, I have to say. This is just an example of product development, and you can see that this has actually driven traffic to VG from all over the world. All right. Schibsted Growth. I won't spend too much time on that.
What I can tell you is that there's a positive development in Schibsted Growth and especially Lendo. We also have some other interesting examples in the personal finance sector. The general development is good. What we're saying that the strategic review of Lendo will be concluded and announced during the third quarter. Right. I think actually, here I'd like to invite you, Trond, to go through the main financials.
Thank you, Rolv Erik. If we look at the second quarter, as Rolv Erik told, we are proud to report record figures. That is something that we have been on this course for for some quarters now, and we continue to deliver. If you look at second quarter last year with this second quarter 2018, you see that France is a significant contributor, continue to deliver on all the verticals. FINN also is doing that in Norway. Of course, Sweden is still somewhat weak. What is good to see in Sweden is that the underlying verticals, like the car market, is flattish, and the job market is continue to grow in Sweden. The figures is hampered really by display ads.
The underlying performance is quite okay on the Blocket site. Spain also strong figures, especially in the car and real estate market. That's good to see. Of course, we have taken down the investments that we have guided for. Now we invest, first of all, in Shpock, main part in U.K., and then in Mexico. Publishing somewhat down, but underlying, also good results there. The Growth portfolio continue to deliver with the Lendo. Also we have some interesting new concepts that looks very promising, like in the consumer finance part, Bynk, and also Hypoteket, which is more in the real estate financing part. Promising development in the Growth portfolio. We have improved the EBITDA.
As you see, it's up 29%. Operating cash flow has strengthened significantly this quarter. CapEx we are guided on, and is, that is slightly down. On all these KPIs, we continue to deliver as such. Going more into detail into the second quarter P&L, you see that we having an EBITDA just above NOK 1 billion if we exclude the investment phase losses, first of all, in Shpock. If you look at other items that we can explain in the P&L, we also have some write-down in the product tech portfolio.
That is due to the nature of this kind of activity, that you from time to time stop projects, and then you need also to do some impairment, and this goes for the Rocket platform. We continue with some of the important component in that part, so that's good as such. There is also some other minor projects that we have taken one off effect in this quarter. We also have some gain from we have exited Thailand this quarter. That's also with about a little bit more than NOK 20 million in the figures. That gives a profit before tax, which is NOK 5,983, which is certainly down from last year.
We have a significantly one-off as a result of the Telenor deal. We bought Brazil. That was a good acquisition, and then there are some technical writeup that we had to do last year. If you just look at our building blocks on where we actually continue to deliver, and also look at guidance going forward, we keep the important 15%-20% top line growth in the online classifieds. We also stick to the guidance on the investment. On publishing, we say that that is second half on the level of first half, so somewhat flattish there. The same guidance on both headquarter and CapEx as before. Just to remind you, we have a strong balance sheet.
We have a target to have a leverage of Net debt to EBITDA between 1-2, and we are below that. We believe it's right to be in a good position to continue to look for bolt-on acquisitions and allow ourselves to be slightly overcapitalized compared with the targets. If you just look at what we have done in M&A over the last couple of years, we have done a lot of, as we see it, good acquisitions. First of all, some niche players in France, like Bien'ici, some real estate site there. We have done some in Mexico on the next strengthen position there. We have acquired Milanuncios.
We have had Habitaclia, which also have proven to be quite good acquisition, with focus first of all in the Catalonia real estate market. Also Brazil, we acquired that a year ago. You see that Brazil continue really to deliver strong growth, as, told by Rolv Erik. Happy to report status of that. The guidance, Rolv Erik, would you like to come up and take the final word on the figures?
Yes. Well, I think we've been through the most important messages. It's a very good result for Schibsted this quarter. I'm happy to report that. On the other hand, there are no big surprises. We're working hard, and we have a lot of good managers out there that are working hard to deliver. We continue on the steady path. Then I think I'd like invite Sondre to come up here with us, then let's have a Q&A. Where is it best for us to stand now with the camera? We can actually turn off the.
Just come a bit further.
Okay.
Yeah, we're good.
Right. Okay. Let's open up for questions or comments here in the room first. Even more, even closer? Okay. You want a family photo or something?
Preben Rasch-Olsen, Carnegie. Can I sit here?
Yes.
Or do I-
Sure.
Okay. Thank you.
If you want to be part of the family photo, we will take that afterwards.
A few questions. First on FINN. You are spending more money in the first half of this year on FINN than you did last year. Last year, you were fighting quite heavily against letgo. I'm just wondering, why don't you lower your expenses in FINN? Is it really necessary to spend that much money?
I can comment on that. We also have Anders here in the room, the CEO in FINN. I think the second quarter is a strong quarter for FINN. You're right that last year we had high marketing spend or higher marketing spend than normal in FINN, and that marketing spend has come somewhat down now in the first and second quarter of this year. At the same time, we are investing in product development in FINN. We are increasing our technology investments, and we are also having some increase in other costs. Underlying, there's nothing abnormal in the cost development of FINN compared to previous quarters.
Also on Sweden, you are talking about the reduction in display advertising, and Aftonbladet online is only growing 1% in the quarter online. Are you losing market share? Are there some new players in Sweden or is there something strange in the Swedish market?
Well, I think there is generally market moving more towards programmatic price pressure. I would say that we're not really losing market share. It's the market in itself. If you look at the Blocket figures, I think actually display is down close to 12% in second quarter. That really explains the weak Blocket results. The underlying verticals is, as I told you, is doing okay, flattish car and up on jobs. Not really losing. It's a little bit different, lower price market, and more competitive general situation in Sweden.
Other questions? Something here from those following us on the web.
Yes. We have several questions from viewers on the web. Can you say anything about the growth rate in Leboncoin adjusted for the acquisitions? You told us about the margins for Leboncoin standalone. How about the growth?
We have also a minor effect on the top line. I would say that we are still within the target of 15%-20%, even if we adjust for those acquisitions in France.
All right, can you talk a little bit more about Sweden on the classifieds? When would you expect to come back to revenue growth there? What is the output for display advertising?
We just commented on the Swedish display advertising market in general. Of course, we are investing in the product development and our sales capability to change that trend also for Blocket. When it comes to Blocket more in general, I think, as Rolv Erik also commented on, the development in cars, we are satisfied with the development there. We are launching, and we have been launching in the second quarter, and we will be launching in Q3 and Q4 many new products in the car vertical, making Blocket even better for the car dealers in Sweden. We are, by far, the number one player when it comes to traffic and leads in cars, and we will continue to increase that.
We are optimistic in terms of the development in cars and jobs going forward. On the display side, I think it will takes somewhat more time than just the next quarter before we see a change of development there.
Okay. On Brazil, great to see that it turns profitable. Margins, however, are somewhat down compared to Q1. Should we read anything into this? Is the margin progression on track?
No, you should not read too much into that. You know, the important thing is Brazil has a great momentum in their business, is growing at very, very healthy rates. Of course, the margins, I would say then the, rather say that the first quarter was a little bit above expectations. There's is not main focus on margins, it's a focus on growth, and then we know that the profitability will come. I'm very happy with Brazil.
All right. A question on Spain. The margins were very strong. Could you please talk a little bit about the market development there? Is the margin sustainable? Over time, what is the kind of a range that you would expect? Is it the Leboncoin levels or something lower?
No, I think I commented that already. That, and again, the margins, I don't know, I'll repeat it will vary from quarter to quarter. I think this was a very good quarter. Also due to lower marketing spend. Of course, the trend is positive. The long-term trend is positive in Spain. That's heading north. W e'll take our time and do the right things. This quarter was relatively strong.
All right. A couple of questions on Lendo. First, could you comment a bit more on the Q2 development? A bit of slowdown on the top line growth. Secondly, on the process of finding strategic partners, what is the status there?
No. Well, when it comes to the performance in Lendo, we are still happy with that. It's right to say that the growth rate somewhat slower in Norway, but we believe that is all something that could improve again, and especially continue to do well in Sweden. We are continuing also to look for new markets to launch. When it comes to the process itself, we will come back to the market during Q three with a more disclosure and conclusion on that topic.
Trond, talk a little bit about the M&A strategy. Could you please elaborate a bit on that? Why are you happy to be unlevered in the near medium term? Is it a reflection of perceived high valuations in the market, or are you keeping part of the drive with a specific asset in mind?
Well, we're, we have shown you that we are quite happy with acquisitions that we made the last few years. We're looking to do more of those type of acquisitions. We are now in the financial positions where we can do that, and where we have the ability to strike when we see good targets, and of course, we're continuously reviewing targets. All right, I can't be more specific than that.
All right. I think the last one from the web for now at least. Can you say a little bit more about the Rocket Project and the decision to write down values there?
Well, I mean, we certainly have detail project accounting for all our product and tech. That is, as we see, a prudent way of doing it, capitalizing a fairly small portion of the resources we're putting into these different projects. The Rocket Project has been a project that has been going on a couple of years, that has been some adjustment in direction as a part of the reorg and now into the two divisions. We do some of these project closer to the sites itself, and some of the core functionality is now written down as we continue in a little bit different direction in part of the components. The.
We can utilize a lot of resources, but we have taken decision to write down, so to say, the core platform part itself.
We have invested a lot in product and tech, and we'll continue to do so. I think that is very important in order to, because you need to have those products to development. Of course, some, as we experiment, some projects will be very successful, some will be less so. I think that's the nature of VM. When it comes to Rocket specifically, we would then transfer some of those capabilities over to other sites. I think I'll, I don't want to go any, into any more detail on that. In general, we're happy with our development in product and tech.
Okay. There's one last question here. Could you please comment on the other developed markets? Please give an update on that, which is Italy, Austria and Ireland primarily.
Well, yeah. I think we are happy with the development there. I think there are two things there. The verticals continue to deliver quite strong in most of these markets. We see some negative effect of the display in, like in Italy as an example. It display varies from market to market, but the performance have improved somewhat in Ireland. Italy is I would say a little bit weaker, as first of all, as display. Austria is doing well. All in all, happy with the underlying development.
Okay. No more questions from web. Any more questions in the room? I'll remind you that there is an opportunity also to participate this afternoon in a telephone conference. All three of us will also participate there, and also many investors that are not based in Scandinavia. Please feel free to dial into that. Otherwise, I'd like to thank you for attending and wish you all a very nice day and a good summer vacation. Thank you very much.