Well, a really good morning to all of you. It's 9:00 A.M., so it's time to start. Welcome to this presentation. This is an important day for Schibsted. We have the AGM coming up in a couple of hours and, but first, we'll present the Q1 results for you, also with some big and important news. As normal, it's Trond and I will give the presentation, but I can assure you that we got very qualified members of our group management sitting on the first row here, which can help to answer questions you might have. The agenda looks like this. We'll have the normal points as with classifieds, media houses, and the financing. We'll start with the big news of today, and that is our offer to acquire the Swedish real estate site, Hemnet.
Now, I can tell you that Hemnet has been very high on the list of acquisition targets that we thought were the best companies to get involved in for a number of years. I'm very happy now that we are in a position to make an offer for the company, and I'll take you through it quite carefully. Hemnet has for many years been the real leader in the Swedish real estate market. It's got most traffic, of course, but most importantly, all the objects in the Swedish real estate market are listed there. All Swedes will know that when you relate to when you buy and sell something, this is a very important site. It's got high brand awareness, and they have been owned by the real estate agencies, still are, and their associations.
They have been quite careful in their monetization. Listing fees were introduced then as late as July in 2013. Then they're gradually building that up. That means that the company is still in a relative early phase for monetization. The good thing with this company is that I think that It's really a prime asset, it's in a very good position, and they have excellent growth prospects. I believe that this company will be able to achieve very good growth rates in the years to come. There are also synergies, of course, with Blocket Bostad.
If you look at the comparison, there of their turnover, I could tell you that in rough terms, this company is, in turnover, it's approximately half the size of Finn when it comes to Finn, Bostad, Bolig. Then, of course, the size in Sweden is double in terms of markets. I think this is, it's a great company, well-positioned for the future. They got a business model which has aligned the interest, between the realtors and the site itself.
I can also tell you that we've done our own estimates, of course, but in Sweden, which is a very digital market in almost all senses, actually, when it comes to the total marketing spend that the realtors are using on their in total marketing, it's a relatively limited part so far that's found its way to the web, and there's still a lot of offline advertisements. Comparing Sweden to other markets, here is less developed than you normally see in Sweden. Of course, in connection with this acquisition, the current owners will enter into a cooperation agreement.
There are some hurdles to be overcome, let me go into that, what we've done today is we made a conditional offer for 100%. There, the total price is NOK 1.5 billion. The offer is conditional on two issues. One is that we'll get 100% of the shares. There, as you can see from this illustration, 50% of the shares or owners of 50% of the shares have already accepted our bid. The offer is conditional upon the remaining 50% also saying yes. Of course, on approval by the Swedish competition authorities. Hopefully, that will go relatively swiftly if they decided to take it into what we call phase II.
I still expect them to be able to clear it in this year. Big and important news for us is this company's been on top of our list of desired targets for a number of years. I'm very happy to announce that news today. Okay. Going into continuing with our classifieds business. Well, as you know, we're striving and we're working hard and we to become a global leader in online classifieds. We are, of course, among the leaders. We're present in many countries today, reaching more than 200 million people worldwide. The expansion has been has increased the last years.
What we've seen then, especially there, is that last couple of years, we've seen a lot of value creation in the markets that we're already in. That happens in various ways. Of course, we do organic growth, which has always been important for us. For instance, now in France, we're using the traffic engine LeBonCoin to entry into other parts of the market, such as real estate. Let's get back to that. Same thing in Italy. That's getting becoming a very interesting position and growing at a high rate. In the same market that we're in, we've also focused a lot of our M&A activities. Of course, last year we did Milanuncios.
Couple of years back, we did the car vertical in Hungary. Now we're also making the offer for Hemnet in Sweden. In addition to that, the third lever has been to do structural agreement and mergers with them, particularly the OLX in countries like Brazil and the others that you're familiar with. Here, a little bit of overview of growth and what's how it's happening in the traffic, on the traffic scene. Here you can see that the year-on-year growth in the European portfolio is still very good. Why are we so focused on traffic? Well, traffic is what leads to a liquid marketplace. Liquid and good marketplace, which is good for the consumers, for the people buying and selling, which also then positions ourselves in the long run to have good monetization.
As you can see, the traffic growth outside Europe is very high. This is, of course, boosted by the mergers that we've done, particularly in Brazil. Right. Moving on to our biggest sites. Let me start with LeBonCoin in France. I'm impressed by their performance. They continue to grow at a high rate, with also, as you can see, a very good margin. They kind of they're firing on different cylinders. They're doing well in the advertisement display market and have a substantial market share there now. The premium features is still growing for private. We're seeing it growing even more now for professionals. The real estate, let me get back to that.
Still, this very large site is still growing in traffic. Real estate. Well, as you know, we have this agreement with Spir about the bundle sales that expired early this year, or 1st of January. We've developed our own products that is marketed directly to the real estate agent. That seems to be very well received. What we're seeing now is a lot of customers there signing up with us. It's a big market in France. It's 25,000 real estate agents. It's also a big part of the C-to-C. They are to a large extent already on LeBonCoin.
We know that many contracts expires by the year-end, so it'll be an interesting to see during the season towards the end of the year. What we see so far is very good. People sign up and the real estate agents are actually coming actively to us. Spain, important market for us, they're back to a revenue growth of 10% on a comparable basis to last year. It's several factors happening there. We're working continuously with our sites to make them better and make them more user-friendly. That helps growth. There's a macro improvement. We're working more efficiently with the sales. We're seeing that there's less churn now with the big real estate agencies, car dealers, et cetera.
That is, of course, a better thing, and that is due to with how we professionalize our sales efforts. Of course, which is very important and will continue to be so, product development going on. Segunda Mano is has launched several versions of their new apps, Milanuncios soon to come. Macro development seems to be going well now in Spain. I just saw some unemployment figures. I'm sure you saw that with a very positive development last month, published this week. For the people in InfoJobs, I think this is great. InfoJobs is a great company, and, you know, I think for people working there, they have a lot of fun and a meaningful job.
Not only are they working in a company that's doing very well and growing, they also have a very meaningful job in actually providing jobs to unemployed in Spain. The sale of the new contract there has developed very well in the first quarter. Of course, as you know, it takes a little while before all that translates into revenue, but it will do, and the development is good. If you look at the traffic development in Spain, you can see that first Segunda Mano in particular, but also for Fotocasa, there you can see that the mobile traffic is now very, very high. More than 50% for Segunda Mano.
You can see that for Milanuncios, of course, the traffic to the mobile website is very high, but not to the, but they haven't had their own app. That will be launched now in June. I'm excited to see how that will affect them. Good traffic development in all of our sites. Italy, also important market for us and, you know, things have taken so much longer time in Italy than in some other markets, but the underlying development is very sound. You can see there also the same tendencies, of course, with web and apps. The total traffic is growing well, and we're seeing that the most comparable competitor, which is Kijiji, there the distance has increased significantly.
We've said that we're invested in marketing in the first quarter, and we'll continue to do so. We are also, we have a leading position in generalist. We're also building more into the verticals, I think particularly cars, where we've had a good volume development. I think it's fair to say also that we're getting more and more real estate content actually on the site. Though that's very early stage, so not something we'll monetize now, but it's good for the development of the site. In Finn, well, it's Finn is a great company doing many good things.
If you look at the results this quarter, it's a little bit of a mixed results because some things are going very well, like real estate is going well in the regional market now. As you know, we stopped charging for privates on the general list, on a comparable basis, that influences us. This is according to our plan. As you know, our plan has been to boost the traffic on the site, that is happening with the number of ads increasing. If you adjust for that, then you see an underlying revenue growth of 5%.
There's been soft development in the display ads, and Finn is working hard on developing new products. For Sweden, in Blocket, they're continuing and working along. I think you can say that they have 5% revenue growth. In Sweden, what we've seen, of course, is the car markets, the car dealers have taken a bigger part of the secondhand car market. The cars will still be on our sites at a somewhat lower monetization level. We continue our expansion into the verticals, real estate and jobs. All right. If you look in the companies that are in the investment phase, you'll see that there has been a successful integration with the sites owned by Naspers.
I think particularly Brazil is doing very well. Let me get back to that in a second. It's now the second biggest site in our portfolio. Mexico has also performed a merger with local OLX sites, developing well in traffic. Hungary, that deal was announced in connection with the first quarter, sorry, with the fourth quarter result, and that will eventually happen and take place then in May. There's also good traffic development in the Asian joint venture. I shouldn't forget Finland. They have a healthy development so far this year. All right. Let's just spend a little bit of time on Brazil. I think it's a great company. They now merged the two sites together, also the management team.
They have an important presence both in Rio, where the headquarter is, but also then in the sales office in São Paulo. They're very good at developing new products, doing very well on Android apps, and the traffic is growing a lot. Normally, you'd expect if two sites merge, that one plus one becomes less than two because there are many people who go on both sides, both sites to place their ads. Here, in fact, it's actually one plus one equals two, the annual growth comes on top of that. You can see that the number of ad insertions is growing very, very healthy. Very healthy. Also the second-largest then in the SCM portfolio now. We've got some questions. How is Shpock doing?
What are you doing on the native ad? As you know, we have acquired a majority in Shpock. I'm happy to say that they are developing well in Austria and Germany, which has been the markets that they've invested the most in. Particularly in Germany, they're making good progress. They have been present in the U.K. market as well, and we're accelerating that now, and we're seeing that as we accelerate it, the ratings in their in the App Store goes up. I think it's fair to say that we're pleased with the development of Shpock. In fact, we will consider launching it in other markets. That could be markets that we're already in, but also other European markets.
Let me say few words about the product development because I think mobile innovation is really a top priority for us and we are developing what we call the next generation app both for iOS and Android. It's so far been launched in six markets, among them Brazil and Mexico and some other important markets. Will soon be launched in Spain. That is a very important job for us, and we'll continue to pour resources into developing those apps. Because the user interface is important, user habits, they expect to have the convenience, and such as easy ad insertion and then proximity search.
You can search for things that are very close to you, messaging in-app, et cetera, et cetera. That is high on our agenda. Right. That's a lot about the classifieds. Let me move on and go into the media houses. Well, I can tell you one thing, and that is that there are lots of good journalists and editors in the Schibsted family, and I'm very proud of that. This is a picture of this week because there was a, there's as many here will know this, there is a media week in Bergen, and they award prices. I think it's fair to say that very many of the most important prices were awarded to Schibsted and to VG, Aftenposten, et cetera.
We also seen that our Swedish media houses have received a lot of prizes this year, both Aftonbladet and Svenska Dagbladet. I think this is important and of course the journalistic content is extremely important also in the new digital age and is really the engine for the media houses and their transformation. When it comes to the numbers we have, I think I've said also at the last presentation that the start of the year was a little bit tough. It's more competition in the ad market, programmatic taking a larger share. VG is seeing that. But there's lot of good work going on.
I think also while there's been press coverage about VG and VGTV, well, they're making an excellent product and I think we need to have a little bit patient in the monetization around that. The latest things I've seen is has gone in the positive development. For the big subscription papers, I think it's fair to say that they're continuing as they have been doing for the last few years, working hard to both do a good print product, but not least with the digital transformation. I think if you look at the numbers in itself, there are no big surprises for those who will follow this closely.
Print advertisement is going down for the whole market, and then online revenues is growing. You know, I would like it to grow even faster, and we're working hard on that. The market conditions so far this year has been a little bit tough. I think encouragingly, the circulation revenues and there's combination we're seeing where we offer subscription both paper and online. They have a healthy development and are doing well. As normal, I think they have a good focus on their on the cost side. Moving on to tell you a little bit about what Frode presented at last presentation, is that we're working very hard to do centralized data-driven products in Norway and Sweden.
When I say there are big changes going on in the advertisement market, of course we have to change as well. That's why we're investing heavily in making new advertisement platform and identity and getting to know the users better so that we can offer good and target-targeted segments to the advertisers. There's a lot of things there in the pipeline, and we're also working much more centralized across the group. So that for instance, now, in the job sector, for instance, Finn will take care of that and represent the whole portfolio with data-driven and good products. All right, let me move on to growth. Well, you see that there is, I think we continue the trend that we see so far.
There is 16% online revenue growth if you exclude Hitta.se. What are doing well is the personal finance sites. Lendo is doing very well and also Comparis. Then you're seeing that their coupon site in Sweden, Let's Deal, is now actually the passed Groupon, which I think is a good achievement. So far we've we haven't talked about too much about Prisjakt. It's a price comparison site. Let me just show you that they are doing very well, and they have developed a clear leading, market leading undisputed in Sweden and Norway. There you're seeing that revenues are starting to come, growing at a good pace. Then we're also experimenting in some other countries. Traction seems to be good. It's a very good product.
Of course, Prisjakt with their position in Norway and Sweden will also be important in the ecosystem because they're adding valuable data for us. Right. I think that was the most important things concerning the operations. I'll leave that to go, for you to go through the finance, Trond.
Thank you, Rolv Erik. I would say that the development in Q1 is a good underlying development. We have taken a lot of actions this quarter. Just to remind you that we are, in this quarter, have done the integration of the deal with Naspers, meaning that we do integration in countries like Brazil, as an example. We have also sold and bought some assets. You will see, of course, effect of that going forward. Also in Q1, we have done the selling of Romania and buying Hungary, which we believe is quite important also in Europe. We continue to do in-market consolidation, and also we have decided to exit Switzerland. Focus on core countries, core operations is quite important.
If you look at the underlying EBITDA development, you see that we have still development in Norway, in the media houses, continue the digitalization, but able to keep the readership revenues. We have good growth than in France and in the other classifieds assets. Also we're seeing that now Spain is picking up. There is, as I said, a lot of exciting underlying news in Q1. If you look at the details of the income statement, you see that we have an EBITDA of NOK 376 compared with NOK 410, but that, of course, implies that we also have done a lot of then investments in Q1 in different areas.
And we have taken a gain of NOK 450 million as a result of the deal that we did with Naspers, first of all, the effect of Brazil. So that's in the figure in the 354. And then also, we have sold Aspiro, having the brand WiMP. So that's also included with a gain of 238. And also we have a gain of exiting Romania, which is in the figures. So that, of course, explains the operating profit of 873 this quarter compared with last year. We have guided the market when it comes to digital investment going forward. That should be a little bit more than half of what we spent in 2014.
What we see today, of course, this is little bit dynamic, what we see in different market. We expect around EUR 100 million in 2015, in both on the EBITDA and JVs as investment in new growth initiatives, first of all, then in classifieds. Web TV, important to notice, we continue to strengthen our position there, both in VG and Aftonbladet. Of course, that's the burden of P&L, close to EUR 100 million. We have also investment in first of all in tech and ad products that will be increased EUR 100 million-EUR 200 million compared with what we had in 2014.
We will capitalize according to IFRS 60%-70% out of these expenses. Looking at our financial position, we have a strong, stable position. We have a good maturity profile. We still have some capacity also on the balance sheet to grow as such. The board has proposed to the general assembly a dividend of NOK 3.50 per share, which is stable dividend as we have had in the past. Also in line with what you typically see for growth companies like Schibsted is in similar term for other companies, especially in Europe and U.S.
If you look at the underlying tax rate, we, as you know, prudent accounting policy, meaning that we don't capitalize tax losses in many of the markets that we invest in the classifieds. If you look at the underlying tax rate, we pay around 29% tax. Looking at the key financial figures, we still have a good cash flow, and we have maintenance CapEx this quarter of NOK 129 million. We are also having net interest-bearing debt of a little bit more than one over EBITDA, which is KPI, key figure measurement typically used. That concludes the finance, and then I leave the word back to you, Rolv Erik, to sum up.
Thank you very much, Trond. Oh. Is this better?
This better.
Okay. For the classifieds, we'll continue our organic growth. I think, if you look in the two-three-year horizon and look at countries like France, Spain, and Italy, they will be very important for our growth there. We'll continue our strategy also with bolt-on acquisitions, as you've seen an example of today. I think for the media houses, there's a lot of great work going on. I think that we're ahead in terms of product development, and especially now with new data-driven products, there's a lot of good things going on.
I think, however, you have to be prepared because of the advertising market and the shifts there and the print going down, quite heavily, that there's still going to be margin transaction as we've said, and that there is some volatility in the Scandinavian ad markets.
We're continuing our step up in technology and product development, and that will, I believe, enhance our total position and create new revenue opportunities for us. Right. That was really the presentation we had prepared. Now, of course, Trond and I or other members of the group management will be most happy to answer your questions. Any suggestions? Here's one here.
Thank you. Marcus Becker from SEB. I have three questions, if I may. Firstly on Hungary, how far are you from moving that asset into a more established phase? You mentioned that you're lowering your EBITDA losses.
Hungary?
Okay. The second one is in Sweden. In the annual report, you mentioned that both recruitment and the job sections are contributing with a negative EBITDA. If we look at this quarter, how would the underlying margin have been on Blocket if we without jobs and recruitment? Thirdly, on Sweden again, how would you view the situation of the authorities approving the deal or having any reason to not doing it? Thank you.
Well, you know, I can answer the last question, start with that, and I think I'll leave the first ones to you, Terje, in the meantime. I think the competition authorities, this is obviously something that they'll look at. I think they'll look close at it, and we've discussed this with our lawyers, so of course. That's why I said that they might decide to take it went to what we call phase II, a more thorough investigation. We believe that after having gone through the market data thoroughly, that they will allow that deal to happen and pass it through. I think it might take some time, and that's why I said by the year-end.
When it comes to more specific questions about Hungary, do you wanna answer that, Terje?
Yes.
Microphone.
The focus in Hungary is still traffic. We will focus on the merge now in May and see how the new site develops. We will have, of course, a good position there, so it would be possible to move it into another phase quite soon.
The third question is about margins in Sweden. I think it's fair to say that we're saying that we're investing in real estate and jobs, and obviously, that is affecting the margin. We haven't been explicit on exactly how much.
No. The only thing I can add is that Servicefinder, as we have stated, is included now in the Blocket figures. That is a marketplace for craftsmen, et cetera, which is very successful in Sweden. That's now included in the Blocket figures and have raised somewhat the margins because that's another type of margin business. That's also part of the explanation, of the decline in margin in Blocket.
If you look ahead then to next year, I think there you'll also see that there'll be some not only growth in the Hemnet, of course, which I'm very happy about, but also that there'll be synergies between the Blocket and the Hemnet thing.
Thank you. Martin Stenshall, Danske Bank. Exciting to see the news on Hemnet. A couple of questions there. Could you comment something about your plans, if this goes through, in terms of pricing monetization? I'm sure that's something you wanna keep close to your chest, but if that goes through, you will have a big chunk of that vertical. I guess the competition wouldn't be that a big issue. Could you please comment on your view how to drive this?
since it coming from such a low level in Sweden?
Well, I think I wouldn't comment too much on that and certainly not go into, you know, what will be prices, et cetera. More on a general comment is that we've been kind of in Norway, we've been good at holding, you know, the compulsory fees at a relatively limited level, but been able to take other kinds of monetization to make good marketing packages for the real estate brokers, et cetera, which comes kind of as an additional product, which is, has become a very important source in Norway. We're seeing also those additional features in other countries becoming more important.
You know, I think that's why I pointed out that there is still actually a lot of money in print in Sweden, that I think there's a good potential for that. Not only, you know, compulsory listing fees, but actually additional marketing.
I think it's fair to... In addition to the revenue, potential that Rolv Erik's mentioning, is that we're also seeing, of course, synergies on the cost side and first of all in marketing and other costs. We believe that this is a good asset to integrate into our Swedish operations.
Okay. On to LeBonCoin. You state that there's a really good traction there, and obviously it looks like that, but would you be able to share some color on how many real estate agents that have signed up on your platform now? How is the traction there? I think you mentioned about 3,500 signed up at the CMD in November.
Right. Terje, do you wanna comment on that or shall I take it?
I won't comment on the exact number, but the development is according to our plans, so which is a good development.
Final question from Martin?
Yeah, just a couple of more.
All right.
Obviously, the freemium model in Finn is has surprises on the upside. Could you give us any idea on the how you would be able to monetize on this? When could we see monetization picking up on back of the freemium model?
Martin, I think I'll ask you to come with all your questions, and then we'll see who will answer that.
Okay.
That's freemium for Finn, right?
Brazil, any views when we can expect a EBITDA breakeven? On SPID, there's no news in presentation on SPID today. Could you please comment on the status here, especially in terms of the peer-to-peer payment ambition? Thank you.
Well, I think, let me take the last question, and I think I'll leave the first two concerning the freemium in Finn and Brazil to you, Terje. What I can say about SPID is that is going according to our internal plans. The focus really has been a lot on identity, right? We're just rolling it out on Blocket now. We're rolling it out in Norway. That is very important for the whole ecosystem thinking and being able to offer advertisement products. That has been more important for us rather than the payment part, but that is also now coming. I believe, Frode, that the peer-to-peer payment on Finn is expected in this Q3. Right.
Terje, do you wanna comment on freemium model in Finn and Brazil?
First, Brazil. Brazil is developing better than plans. Which also means that we will monetize sooner than planned. We're having good revenue growth in Brazil right now. The answer is that we will be profitable before what we planned. Not next year.
There's a question about the freemium model in Finn.
It must be repeated to me, I'm afraid.
The question was when to monetize on the freemium model in Finn. When can you expect some monetization on having the freemium model?
I think they already are getting revenue from the freemium model in Finn, so it's more to develop it.
Here's questions.
Could you comment a little more about Hemnet? It seems like two of the major owners have been quite surprised. You called them as late as 10:30 last night. Some hurt feelings there, maybe.
Well, you know, I think those two associations, they consist of very many members, right? It's a delicate matter on how to treat this correctly. The important thing is there then to treat them in an equal manner, and one that does not compromise our obligation towards the stock markets. That's why we've, you know, we've done this in the best possible manner. I'm looking forward to a good dialogue with them in the coming days and week, and hope that we'll be able to provide enough information to them so that they will be able to make a good assessment of our offer.
How long ago did you contact the other two owners?
You know, I don't want to go into details about that, but obviously there's been a dialogue since they have accepted our bid.
The bid is 47x the EBITDA result of Hemnet. Isn't that quite high?
Well, you know, I think that is why I stressed that the growth potential in this company, I consider that to be substantial. Because if you look at the monetization and what they have taken out in revenue so far, in total for Hemnet, it's been relatively limited to what we're seeing in our other markets. That's why I made a comparison with Finn being operating in a country with half the population, but still having double the revenue of Hemnet. I think we're positioned for growth. Yes.
Yeah, we have a few questions from viewers on the web. Just one quick follow-up on Hemnet. Could you please confirm that out of the EUR 162 million of revenues, 50% go to realtors? Then also a question on the market in Sweden on real estate. Could you give us a sense of how the EUR 160 million total market has been developing over time? Has it grown or been flat? Do you expect the whole market to shrink as you see migration towards online from print?
Well, I think it's fair to say that we've looked at total marketing expenses for realtors in a number of countries. But this is, of course, a rough estimate. There's not two lines under that. I think the important thing is that there is a significant potential for more revenues moving online. The revenue question.
Yeah. Well, I'm not going to be precise, but I can tell you that 50% goes to, of course, the realtors. In the NOK 162 million, it also includes all the revenues and display, et cetera. It's not, it's less than half that goes to the realtors.
Okay. A couple of more from the web. Could you please update us on how the Milanuncios consolidation is going? Do you see a further potential of cost elimination, or will the improvements be mainly on the top line there?
The Milannuncios integration is going well. You've seen the numbers there for their continued traffic development. I think it's important to keep the growth momentum from Milannuncios. That's why we're launching the new app. When it comes to the organization, I think you should bear in mind that Milannuncios was a relatively small organization, whereas we have a more sizable and big professional organization. The revenues aren't there. The synergies aren't there primarily on the cost side. Perhaps I think, for Terje, you can give a little bit more color on that.
Yeah. We have some remedies, so the full synergies cannot be, you know, taken out for the next couple of years, just to remind you about that.
That's in the cars in particular, professional car market.
Final one for now from the web. Could you please give some more color on the phasing of price increases at LeBonCoin? Should we expect any over the next couple of quarters?
We normally don't comment upon when we are doing price increases. We're not going to answer that directly. The only thing that we have said when it comes to LeBonCoin is that there is, of course, over time, good scope for price increases, in some of the categories and, like cars, et cetera. That we'll come back to.
Any more questions or comments? Doesn't seem to be that right now. I would like to thank you so much for coming, I'll see, hope to see a lot of you all already in 45 minutes in the AGM. Thank you.