Okay, good morning, everyone. Welcome to this presentation of the second quarter for Schibsted. It's not as many people as normal here in the room. I know that more people are watching us through the broadcast, so I hope that transmission works well. Here are the highlights from the second quarter for Schibsted. This is a quarter without any big news from us. Things are progressing as planned. If you look at the online classifieds, we're seeing that France and Spain is continuing to grow and also have good margins. Positive thing is that we've had a new growth momentum in Norway and Sweden for the classified sites. We're also seeing progress in our sites in emerging markets.
For the media houses, I think it's right to say that it's a continuing challenging market, especially in advertisement. However, there are some positive signs, and I would particularly point to the digital subscription numbers that are continuing to grow. In addition to that, we're seeing that we're having positive effects from the cost savings. That is also, you can see that also with effect on the bottom line. As we've said earlier, we continue to invest in product and technology competence. We believe that is absolutely essential to stay ahead in going forward. This is the agenda for today.
It's quite standard. The presentation will be given by Trond and myself. I also have some colleagues here, Didrik and Sondre from senior management who will be available for question afterwards. All right. Let me start with the classifieds. As you can see there is it's a good quarter for classifieds. Top line growth of 25%. That is of course partly due to currency fluctuation, but adjusted for that, it's still 18% growth. You can see France and Spain. You can see also there's a stronger growth momentum in Norway and Sweden in this quarter. Let's dive into it. Let's start with the leboncoin France. They've had a good development. It's been a good quarter for leboncoin.
They received a lot of attention after they had their 10-year celebration, and recently they also had a visit by former president, now presidential candidate, Mr. Nicolas Sarkozy. That created a lot of buzz about leboncoin. What you can see is that they are continuing to deliver very well in the real estate sector, taking a big, even bigger position, larger market share. The cars has also showed a positive development through product developments. They've also been able to make some new offers, which has resulted in partially price increases, which has given a positive result.
What they're now gearing up for in France is to the job market, so a lot of the marketing campaigns recently, and there has been a lot of marketing campaigns in the second quarter, I think we'll continue to see marketing also in the second half of the year, is that we're now aiming to start charging in the job market. That'll be an exciting process, and that is bound to happen in the fall. In Spain, I think I said that also in the last presentation, we're dependent on the economy, so the second quarter is somewhat slower than the first quarter. That is due to a slowdown in the job market.
The job market in Spain had a stronger momentum in the fall of last year and the first quarter than in the second quarter. We believe that this is due to the political situation, which has been kind of unstable, and that leads to employers not recruiting as much as they would otherwise. We're hoping for an improvement in that situation because I think that will help the job market. Otherwise, the verticals are doing well, and there's also a good development for display ads. We have invested also in marketing in the second quarter, and I would say also that there's an increased focus on product development going forward.
We're seeing competitors in the Spanish market, especially in the generalist sites, and we need to step up our efforts there and improve the product Vibbo and other things that we're working on. In Norway, it's been a positive quarter for FINN. Interesting thing is the car market is still doing well in Norway, and the job market is also having now a more positive development. We don't see the freefall that we did on the West Coast last year. I think it's fair to say that we're seeing positive development also, especially in the building and construction field in central parts in eastern Norway.
In addition to cars and jobs, I would say when it comes to real estate, real estate is relatively flattish, and that is because there is not that many objects being sold. We're seeing a good contribution to growth from the personal finance, which is part of FINN in Norway. On the ad market, we're working to develop new targeted products there. Advertisers. In Sweden, I would say it's partly the same factors that are driving Blocket. It's a strong car market in Sweden and good sales of new cars. We've had a good inflow, especially of professional cars. Also the job market is now playing a bigger and more important part of Blocket. When it comes to real estate, that's relatively flattish.
Of course, we are disappointed by the conclusion by the Swedish competition authorities. We're now re-evaluating our position to see how we still can gain an important part of the Swedish job market. Sorry, the real estate market. Right. Moving on. Our other sites, in all our other developed operations, as we call them, willhaben in Austria is doing well, continuing to grow at double-digit and take a big part of the Austrian markets. In Subito in Italy, we are continuing to be in an investment phase. It's still good growth in the top line there. In Ireland, I would say after the consolidation there last year, we're seeing a positive development both in the real estate and also for a DoneDeal.
Moving on to Brazil, since there's normally a lot of questions around Brazil. What I can tell you is that I'm seeing a continued positive development for OLX in Brazil. They have, of course, by long been the leader in the general space. What we're now seeing is that they're also increasing their positions in the verticals. They are the leaders in private cars. They have the most traffic in real estate. What we're now working on is really, gradually to start monetizing that and launching new products for professionals. Car dealers, real estate brokers, that is then being rolled out state by state. When it comes to Shpock, the same thing as we mentioned before.
Shpock is creating a new market where there is a much larger. Many items that previously weren't being sold are being marketed on Shpock, such as baby and child items, fashion, home and garden. They're increasing that market size. We're seeing that especially in U.K. and Italy, we've had very good traction and also doing well in Germany. Right. That is that was the classifieds part of it. Comes to the media houses. There's a mixed picture. There's still a tough market, of course. You can see that VG and Aftenbladet, they're holding up the results well. Aftenbladet Plus and VG Plus have increased the numbers of subscribers.
We see that video continues to grow on the web. There is good revenue growth for those. We're seeing that there's still a good growth in digital revenues in Sweden, and also VG back now on a positive track there. There's the digital subscriptions. I think that is a very positive sign that we're now, we're now closing in. We're past, soon 80,000 digital subscribers. We're closing in on the target for this year of 100,000. You see that also the total number of subscribers then are growing. I think this is a very positive thing.
If you remember just two, three years back, people would say that, "Well, it's not possible to charge for that kind of content, and people are not willing to pay." I think we're seeing a different development, not only in, not only for us. We're seeing it in other countries as well, and you're seeing it in, of course, in other segments. People are paying for Spotify, people are paying for Netflix, and they're paying for quality content in Aftenposten and the other subscription newspapers. That is a positive sign. Encouraging, I think, because the ad market is of course continues to be tough for these newspapers. The print ads are going down and also, the online revenues are down in this quarter, but there's a growth in circulation revenues.
Didrik and his colleagues have been working very hard on efficiencies and cost measures. We're seeing that cost, those cost measures have effect. There's a much more positive margin and contribution in the second quarter than we had in the first quarter. Right. When it comes to growth in Sweden, I would say they continue on a positive trend. It's particularly personal finance and especially so Lendo, which is proving itself to be a very effective marketplace for people in that market, and that is the leading reason behind that growth. All right. Before I leave it to Trond, let me say a few words about product and technology. That is important for us. Will continue to be very important, and this is where we have to step up further.
We have been able to attract a lot of good people. I'm very happy about that, both here in Oslo, Barcelona and Stockholm, and also in our hub in London. What we're building on can be categorized in these three categories. Of course, in marketplaces and classified things, we're doing a lot of new things. It's partly building new components or with existing platforms, but also building new verticals and next generation. New components could typically be things like improved messaging service. That's important. Improved fraud detection. And all kind of communication, and making it easier for the buyers and sellers to use our sites. We're also looking at what should the next generation marketplace look like. And what could the new real estate vertical look like?
We're working both on shorter-term project components that we're rolling out, and also on what should the next generation look like. On media platform, we have already rolled out in several of our newspapers, new tools for the journalists. I just talked to recently a journalist in Svenska Dagbladet, for instance. She told me she was covering a debate in the Riksdag in Sweden, in the parliament. She could actually publish and edit and do the whole layout, and interview people in the breaks, and publish while she was there. This is the new way of journalism. What you're also going to see is if you try the new VG app, for instance, it allows more personalization than previously, and we're going to see much more of that.
Advertising products is important. We are gearing up there by making much more targeted sort of products. That's why we're driving the logged in. We're also working closely together now with AppNexus, which is the leading independent provider of ad networks. We migrated our sites in Norway and France. We hope also other will join that platform because that is a good and viable alternative to the other big existing networks. I'm, I'm happy about the development we're having in products and techs. Of course, it has a cost that Trond will get back to, but this is absolutely essential for us going forward. Right. On that note, I think I'll leave it to you, Trond.
Yeah. Thank you, Rolv Erik. It's been a good second quarter. The revenues are up 8% compared with last year from NOK 3.8 billion-NOK 4.1 billion. We have an EBITDA before investment of NOK 831 million compared with NOK 753 million. It's good underlying growth in most units. This gives an operating profit after investment of NOK 637 million compared with NOK 642 million. It is flattish, but bear in mind that we have invested more in the classifieds, so comparable figure. We are up close to NOK 80 million on that line. We have an operating profit of NOK 357 million compared with NOK 510 million. It is somewhat down compared with last year, we also had some gains.
Underlying trend is certainly positive. We also have some positive effect on the net financials. If we go to the development between the years, you see that we have an increase. First of all, we continue to grow in France. First of all, we also have Norway, FINN, and Blocket is doing quite well. We are positive, very positive on the development in Sweden. Spain, Rolv Erik had told that we still have seen some more challenging job market lately. Also good performance in Media House, both Norway and Sweden. We're happy with the overall result. The EBITDA is improving in all key operating segments.
You see the EBITDA ex investment phase gradually improving over the last three years. I'm also happy to see that the Media House, both in Norway and Sweden, is now keeping up quite well compared with the previous trend. This means that we will continue to invest in organic investments. We have very good underlying growth in all our key metrics, traffic figures, et cetera. If you look at the comparable figure, second quarter this year compared with second quarter last year, you see that we have included much more now, as I told you, in the EBITDA figure of the investment. Out of the NOK 23 million spend, we have NOK 20 million a part of the EBITDA.
We have clearly reduced investments in markets like Brazil, Chile, and other emerging markets. We continue to invest in the digital, and first of all, building then new positions within the classifieds. It is Shpock, which has a very good traction in U.K. and Germany, but also in markets like Mexico and others. We still guide the market that it will be an investment, as previously communicated, from NOK 80 million-NOK 100 million. We continue to invest in product and technology. The investments there is guided to be NOK 650 million-NOK 700 million. It is somewhat up during this year.
We believe this is a thing that we need to do in order really to have the best product, both in the classifieds and in the ad markets, but also in the Media Houses. It is likely to continue to go into 2017, but of course, it will be aligned with the resources we have also in the different units. Over time, we should be able to take out efficiency in this area and also that we should see some improved revenue streams from these investments.If you look at the key financial figures, you see that we have a strong cash flow in this second quarter. The net interest-bearing debt is around NOK 1 billion. We have a good ratio in then compared with the EBITDA.
We also may allow ourselves to be slightly since we are a growth company, and we're in that position. The CapEx has gone slightly up. As a result, also some more CapEx into the product and tech. We still guide for an underlying tax rate of 31%. That is as before. We, of course, have then also large losses in emerging markets that we haven't really accounted for tax-wise. We have a strong, stable financial position. We have decided to, or we actually extended the maturity of a NOK 300 million facility from 2020- 2021. We have a good balance and maturity profile going forward. I think that was the headline from the finance.
I leave the key takeaways to you, Rolv Erik.
Thank you, Trond. I'll finish up again with the highlights. No big news from us in this quarter. We continue to execute on our. Is this better? Okay, thank you, Robert. Okay, no big events or big news to be announced today. We continue to execute on our well-known strategy. We see a positive development continue for online classifieds. I'm pleased with the development in France. I would say in Spain it's as expected, a little bit slower down due to the economic year situation. Good progress for FINN and Blocket, and also in emerging markets. It's tough for the media houses, but we're seeing positive signs there as well. I think the advertising part will continue to be tough.
We're seeing positive things in terms of, first and foremost, a strong inflow of digital subscribers. Also we're seeing results of cost savings. We continue to invest in product and tech. Classifieds to develop new components, and also the next generation platforms, media house platforms, and also better products for advertisers. Those are the key takeaways from today's presentation. I'd like to draw your attention to the investor days that are taking place in London on the 27th of September and New York on September 28th. Right. I think we'll open up for questions. Here's a question.
Fredrik Steinslien from Pareto Securities. A question on headquarter and all the costs that you guided for this year. Implies some NOK 180 million per quarter for the second half of the year. Is that kind of a run rate we should expect also into 2017, or is it somewhat one-off nature for 2016, some of these costs? Can you elaborate a bit on that?
I think you should expect that we see some of these costs going into 2017 that we still continue to do some recruitment during second half of this year. What I said is that during 2017 and into 2018, I think that you should see that we are able to take out more efficiency by aligning resources centrally, also with local resources.
Okay, one more, if I may. On leboncoin, you didn't state any guidance there, so I guess 15%-20% is the guidance you maintain there? Or can you say also something about how Q3 so far is shaping up?
You know, it's very early in Q3, so I think that's too early to say. You know, we're happy with the development on leboncoin, and I think the previous guiding, or the one that we said at the very beginning of the year, still stands, that we'll see a top line growth between 15% and 20%.
Thank you.
Reidar.
Reidar Næss, Carnegie. Good morning.
Morning.
I'm trying to understand what's going on on the advertising part in especially Norway, and to a certain extent Sweden. Can you try to explain the difference on the sites where you have joined forces with AppNexus and the sites you have not? Where do you see the development going forward for your advertising revenue? Because reason for asking is it seems like you were losing some market share, at least in 2015. Is that turning around, or is still Facebook and Google taking everything?
Well, I think, to be fair, I think, all players have actually been losing share to Facebook. In particular, I would say. I think it's, what we've seen in Sweden is that we've had some positive products developed at an early stage with geotargeting and a lot of logged in apps, and that has helped us and given us a stronger performance in Sweden. When it comes to Norway, we're also starting to develop these products now, and I think that's what you're actually seeing in Q2, for instance, in VG. That is a more positive development. I think that the new collaboration with AppNexus will give us new opportunities.
We haven't seen that in the numbers yet. It's too early because that migration happened in the second quarter. In Norway, I think it's fair to say that we haven't had the right products in full. that we're developing them now, partly through our own logged-in solution, which can help target specific or audience groups. In collaboration with AppNexus, I think we can see new revenue opportunities. I think that market will continue to remain very competitive, but I think we're now set up to compete better. Right. Any other questions? Here's a question from the webcast, so you, Christian, can have.
Thanks. Quite a lot of activity on the web, I have a few one questions here. First one on the Swedish real estate. Should we expect more marketing expense in Sweden now? You expressed commitment to the Swedish real estate market. How do you plan to approach that?
Well, I think that's, it's a bit early to say what we're doing. This is, of course, a very, this is a rather new situation. What we're doing now is we're evaluating our position and deciding how to move into the Swedish market. Out of competitive reasons, I don't want to give away anything about how we're, how those considerations are going. Just expect us to be continue to be interested in that market.
All right, I'll just follow up with a few more. You talk about cost-cutting in the media houses. What level of profitability do you consider acceptable?
I think that we, you should expect still some challenging advertising market. On the other hand, we see a great uptake in the subscription revenues, especially digital, of course. We continue to do cost savings, so you should expect the margins to be... I mean, we have a little bit broad range in guiding when it comes to the media houses, between zero and 10. Also we have seen in the dailies, VG and Aftenbladet, they're able to keep up fairly good, I would say, margins. I think that the new targeted product also should help the, both the media, the two media houses.
All right. On Spain, do you see trends in the job vertical reversing, becoming more positive after the elections there?
I think that's somewhat early because actually that was in June. I think we have to wait and see. All we can say is that June was at least fairly okay in the job.
All right. you talk about, the strong position in, C2C, cars in France. Where do you think you are in B2C, and what do you do to, continue to grow there?
Well, we've had a good growth in B2C in cars in France this this first half of the year. What we're doing there is to develop new products for the dealers, which has been quite successful. I think we have a very strong position already, I'm happy with the way we've been able to develop it even further the first half.
Continuing on France, real estate. Do you think that you can achieve the full potential of real estate in France by keeping the vertical on your general classifieds platform? May you be better off by distinguishing the vertical better?
I think that the vertical is developing very well as part of.
Marketing connecting the to jobs in Q2. Will this continue, and how should we think about margins in the second half?
Well, I think that we will continue to do marketing in second half. Especially, also the job market, that will be gradually ramped up during second half, Q3, Q4. Be prepared for that. The margins may fluctuate somewhat between quarters.
On the job, vertical, you mentioned that the market value is in the range EUR 130 million-EUR 140 million. How much do you hope to take of that, already in 2017?
we don't guide on that. I think that we will certainly be targeting to get some percentage of that market, I will be hesitant to give any precise figure on that.
Are there any more questions here in the room? No? You still have some questions?
Yeah, one last one, I think, at least for now. You were talking about growth in digital subscription for online newspapers. Can you give any insights into the share of digital compared to the overall circulation revenues? Where do you see this continuing?
Well, I mean, these are typical bundled products. What we have given is then the pure digital number of subscribers being now 80,000. And they are paying close to NOK 200 per month in Norway. I think we are very happy with that. Of course, then we have also the bundled people having both the print and the digital.
The good thing is then that the total subscription revenues in total are up by 11%.
Yeah.
That's something we're happy with. All right. That was it? Okay. Are there any further questions here? Well, please come up afterwards, and thanks for coming, and I wish you continued nice summer.