Good morning, welcome to Schibsted's presentation of the results for the Q2 of 2013.
It's the first time that we present our performance, mid-July instead of mid-August. I was wondering if there would be anyone in attendance, I also know that there are people who follow us live online, welcome to you, too. Normally, Trond and I will give the actual presentation, we also have Didrik with us from the Group Executive Committee. He has delivered a strong financial result, we also have Sondre representing Aftenposten. The agenda looks like the normal schedule. We will start with the highlights.
As for the online classifieds, we are reporting a strong growth. We've seen 15% revenue growth on the top line. Margins are stable, the key sites in Norway, Sweden, and France deliver results as expected.
We will continue the high level of investments. We do that because we have a strong faith in what we're doing, and we also see good results from it. I will be coming back to this. I will also be commenting in more detail about Spain. We have bought out the minority shareholders. As for the media houses, the digital transition continues. They are reporting strong figures.
The strategy that they have now designed for the future developments are very interesting. We have a great faith in the future for our online media, and I'm very satisfied with the developments so far in the media houses. In order to go into details about the figures, we are reporting growth underlying of about 2%. That is top-line growth. We maintain a strong 20% margin.
That is gross margin before investments. If you look at the respective segments, we are reporting a strong performance both for the online classifieds and also for the media houses in line with the previous year.
There are also some non-recurring effects that I will be coming back to. You may remember that I was here after Q1. I sort of blamed things on the bad weather and Easter. Of course, I cannot escape from this right now because as things tend to even out, some of the negative effects in the Q1 have a positive impact on the Q2. We see that especially from advertising revenue for the strong media houses and partly also for FINN. Some of these effects have as a positive impact. Here you see the revenues for the group.
The online share has now risen to 45% of overall income against 39% quarter-on-quarter. Things move forward quickly. We have reported growth both in the media houses and also the online classifieds. They now account for 28%. If we look at the EBITDA, we see that the online share is now 60%. If we adjust for investments, which we do, then you will see that the online share typically increases its share to 62%, so a slight increase.
Next, I would like to move to the various activities. I start with online classifieds. Strong account with revenue growth of 15%, and then we adjust for Spain. Well, why do we do that? Well, because the economic climate is very special. Apart from Spain, not taking that into account, we achieved a 20% growth.
I will also be going through FINN, Blocket, and also, leboncoin. We have a long-term horizon for our investments, and we will continue to have such a horizon. Some of these sites we need to give time so that they can actually gradually build up their traffic volume. Therefore, sometimes revenue kick in later than some of you have expected, but we stick to the plan we have stipulated, and we think that is important. In Spain, of course, the situation is rather exciting.
We have gone in and taken over operational control. We've also done the same with investments. If we look at margins, it is maintained. Well, that is before investments at a good level. As expected, we've also seen a slight decline if we adjust for the investment Phase.
These are of course, performance figures underlying adjusted for the other factors. Here you see an overview of our portfolio. For those of you who don't know our activities so well, we focus on organic growth of the Blocket concept that has been very successful in many countries, of course, the biggest stars is the Blocket itself and leboncoin, but we are working to develop them into mature operations. Of course, these things take time, particularly in countries like France.
The site made a profit after two years, but we also see that from other countries, things take time, but we're believing that we're on the right track.
Of course, we cannot have the expectation that all sites will develop along with the French site, but we are confident in the developments we see, and we will be coming back to that. FINN has reported a very strong result. They have progressed in many areas. The real estate segment is very good. Recruitment ads also good, while cars have reported a flat development.
We have achieved 16% top line growth. Again, we need to adjust for what I sort of blamed the performance on last year. It may not be that interesting if we do that, but the growth itself is strong, a 10% growth. In the Q2, we have also seen some positive effects, but they may not last for the full year. As for Blocket reported a strong quarter, delivered a top line growth.
All right. Some of the same factors that kicked in in Sweden, poor weather, Easter. The used car market that is also impacted by the new car sales, was very weak in the Q1. In the Q2, also slightly down, but the volume for the car segment is somewhat down, but we have made some price adjustments, and therefore the overall result is good. You also see that the margin was lower than previously, but we have kept saying that as we're building new positions some margins will be affected by this development.
In the Q1 of 2012, we had some positive effects that could be attributed to a licensing revenue, but Blocket is delivering strong performance. Some of the new investments have been made in the recruitment ads and also real estate segment.
I believe that Blocket is very good when it comes to developing new sites, and I'm looking forward to future developments. Leboncoin is a very interesting company, and I believe that they have now a headcount of 180 people, which is 40 above what they had at the close of 2012. We have a major task ahead of us to develop the organization.
We need more sellers, more people on the development and customer support. The Leboncoin development is very positive. They're reporting a strong top line growth. The positive thing seen from my perspective is, and what I would like to highlight is that new ads continue to grow and also other segments are growing.
leboncoin are also working with communication and information agencies to show that ads on leboncoin is a good solution, and they are now capitalizing on that. Of course, the car ads, and also the paid ads by the dealers increase and all. For instance, if you receive thousands of ads every single day, some people are willing to pay more for better exposure of their particular ad.
I'm very happy with the leboncoin developments, a 30% growth, slightly declining margins. We have said that this would be a natural development since we are investing in building up the organization. We've also said that leboncoin has now developed into such a large company that growth will gradually also be slightly declining to what we have seen so far. I believe that this is a wonderful company.
Development is highly satisfactorily. Here you see an illustration of the used car market. The dark line is leboncoin. 2 years ago, they started to charge for the ads, and then we saw a steep drop, but then they have come back to just the seller listings.
You can just add on all the private cars, around 600,000. It's all close to 1 million listings, and this is a very strong and very sound development for that company. Spain.
We have InfoJobs, a site that we've own 100%. We have owned it for years. We have other companies like Anuntis, which have a generalist car and real estate segments. Here, it has been operated by our Spanish partner, even though they have been a 24% minority stakeholder.
We have worked for some time now to buy them out, and we launched this at the beginning of this quarter, some weeks ago. This means that effective from that very same day, the open meeting, then our executive management will go in and take over the operational management of that company. This company has had a strong position, and we will now be moving in to take over operations, and I see this as a very positive move.
The philosophy that we've had in many other of our companies, we will also use for this company as a basis that is volume-oriented. We will focus on growth. Even though we have a strong position, there are other players, too. We will give priority now to building up even stronger positions.
I believe that profitability may suffer in the short and medium term. For us, the most important thing is to have the number 1 position. All right. What's happening with the macroeconomic situation in Spain? Well, I can't tell. Many of you will probably be following that just as closely as I do. I've seen some signs of that the cycle is leveling off, there are also other signals.
What we're doing is to work with a long-term horizon for our classifieds positions, and we have also increased sales for Annons even though there's been a general downward trend in the economy. That we are working so that we are ready when the rebound comes, the tick-up, I believe that we will then be in a favorable position to capitalize on that.
We also have some signs that we don't normally focus as much attention on. These are the more emerging sites. The best one is DoneDeal in Ireland. They have developed a strong position and are reporting good margins. For all of these sites, we say that the focus here is also long term. We're building traffic positions. Of course, gradually we will also be focusing on monetizations. Subito is a rather large site in Italy now, but they also suffer, of course, of the harsh economic climate in Italy, and therefore the advertisement market is not very good. It's very soft, but we work to establish long-term positions.
We apply the same philosophy for new ventures. We have increased investment spending somewhat, and we are maintaining the strategy that we've had for the past couple of years.
We have selected some markets that we have great confidence in. Then we follow the developments closely. I can show you this image here. Some people have wanted us to give more competitive data. We're saying that we are not able to do that in view of the competition. We have selected some of these sites that are in an investment Phase.
We here show the volume of advertisement received. Here you see an indication that it follows the focus that we've had. In Brazil, the reported figures were very strong for the Q1. Again, I would like to stress that these are long-term perspectives, especially in the emerging markets, companies will take a long time to develop.
In Finland, for example, I think that our website there looks very interesting. Here in these companies, we expect monetization Phase to kick in before other emerging markets. All right. So much for the classifieds. Let's move to the media houses. I believe that there are a lot of interesting things happening in the media houses. Last autumn, a lot of time was devoted to the comprehensive restructuring program.
All along, we've said that we will also invest in digital competence, and this has probably been even clearer now and during the first six months for the media houses. The underlying development will continue, the development that we've seen for the past years. This has not changed with the change in trends.
Print papers, of course, are going through a difficult time when it comes to advertisements, but we're also in the process of developing interesting paid products. Svenska Dagbladet was launched in the Q2. Fædrelandsvennen a year ago. Stavanger Aftenblad this year. Fædrelandsvennen has now stabilized its circulation. Of course, it will be very interesting to see what will happen in Stavanger and with the other Norwegian papers. What I can say is that many subscribers have actually activated their digital subscription, and this is positive.
For VG and Aftonbladet. VG reported a strong quarter and a strong 6-month performance. In the case of Aftonbladet, margin is somewhat affected by some non-recurring effects or loss. Of course, the print edition had delivered a very strong quarter in 2012 last year.
Of course, we had the European Football Championships. Sweden had a team in the final rounds. Of course, we saw also that this impacted the results. Here you see two papers that are leading in their respective markets. Car segments keep increasing because they see that this works. They very often get the focus of their buyers close to the time when they make the purchase decisions.
We see that the trend is very good for VG and Aftonbladet for mobile products. Especially the mobile developments are very important, and also revenue per user have increased. For the large subscription-based newspapers in Norway, they reported a strong quarter. Here you also see the Easter effect mentioned.
I believe therefore that we should look at the accumulated figures because the Q1 was slightly weaker than normally, the Q2 is slightly stronger for that particular reason. What is good is that online advertising revenues grow. Print advertising declined somewhat, but we also see a very positive effect from the cost improvement program that was implemented last year.
Here you see a cost reduction by 5% year-on-year. That includes also some of the digital investments. We're also engaging in a very interesting strategy work in Schibsted Norway. We have a three-pillar strategy.
One focuses on customer centricity, namely user data, because we have understood that if we are going to be relevant for our readers and for our advertisers, we need to be a lot better when it comes to traffic data, user data, to use it profitably to offer them good products, both good products to our users, our readers, but also to our advertisers.
We have built up some knowledge in this area, but we are still lagging behind some of the large US companies that are competing for the same money. How are we going to develop the digital media products going forward? Well, live pictures, moving pictures will be very interesting. VGTV has had very good traffic recently. We will continue with the investments. For all media houses, this will be an important product.
I believe that we have some very interesting presumptions here. While some of the large television houses are more slow in reacting, we are small and active and can react to developments. Print will be important going forward for several years, and we will continue to develop it. We also need to see how can we use print as a bridge to move people over to a digital platform.
One example is when VG Weekend was relaunched last year. It has done very well. Of course, strong histories have been told. We posted it online as part of VG Plus product, and we saw that, of course, many people also then subscribed for VG Plus.
We need to make several of the online and digital channels to play on the same team, so to speak. We also have representatives present here that can tell you more about this later.
This is just some advertising for schibsteddigital.com, our new digital website. This has to do with building up competence. We need to improve our performance when it comes to knowing our users in order to be relevant and in order to delivering a good product. Digi-data is the buzzword. We have some competence in this area, but we need to improve our act, and therefore, we will be building up a separate unit in order to service VG and also the other sites.
If you know some bright heads and good brains that would like to work with digital media, this is the address to approach. All right. Growth Media. We have our portfolio in Sweden and in Norway. The personal finance introduced by Lendo in Norway is very promising. It's developing fine. We see the same trend in Sweden. There are also some one-off effects that impact on margins.
We believe this is a very exciting portfolio, especially in Sweden, when we are beginning to see a critical mass. This is what I wanted to say about our operations. I will give the floor to you, Rolf. Thank you. To give the floor to Trond. Thank you, Rolf. Well, we see that the Q2's been satisfactorily. We are reported a strong figure.
Overall we deliver underlying growth of 2% for the group, while classifieds delivered a 15% growth. Of course, there's the three established sites that of course contribute a lot to the growth in classifieds.
We're also happy with the developments for media houses, Sweden and Norway. Of course, the Easter effect accounts for some, overall a good effect. If we look at the trend and developments quarter-on-quarter, we can see that there's about NOK 50 million down this year. This can mainly be attributed to investments in new Blocket Verticals in new markets. That is an increase of NOK 92 million compared with the Q2 of 2012. Like I said, we reported strong results in Norway.
Sweden is slightly weaker. This can partly be explained by the UEFA European Football Championship in June last year. It had a lot to say for Sweden. There were also some one-off effect from Hitta and Aftonbladet that actually impacted negatively on the margin. That has nothing to do with the ongoing operations. Overall, despite the significant investments, we are reporting a strong financial result. We have good cost control in our media houses. We have also a program worth 500 million SEK that runs over two years.
We will realize the synergies gradually. You see that we are progress along with the expectations from the program, and we deliver results in line with that.
Significant growth for new ventures, especially within classifieds, but also partly within Growth Media in Sweden, partly also in Norway. If we look at the income statement for the Schibsted group, we're seeing a EBITDA of NOK 555 compared with NOK 600 last year. We don't see any large changes, neither in other costs or depreciations, so that we reported an operating profit of NOK 439 compared with NOK 479. There were some fluctuations quarter-on-quarter, but the interest expenses were slightly down last year compared with the previous year.
Taxes, somewhat up, partly attributable to losses and investments in new markets when we don't capitalize on deferred tax assets, until we come in a position where we can see that we are actually able to realize those assets. We have a strong financial underlying debt situation, 2.1. Got moved slightly up in the Q2, because of a dividend payout.
There were also seasonal fluctuations that affect the figures for the Q2. We paid slightly more in pensions, pension contribution and also in taxes. These are seasonal fluctuations, but there were also advertisement effects of about NOK 100 million that we thought we had in place. This will also have a positive effect going forward.
It's good to bear that in mind when you look at the cash flow for the first six months and Q1. We also have NOK 3.9 billion in cash and cash deposits reserve. Key financial figures, you see some maintenance investments that are in line with the previous periods, there's also a lot invested in digital transformation and equipment.
The key figures show that cash flow were partly impacted by seasonal fluctuations, we will get that back in later quarters. I don't really think that there are much more to say, I think that I should just leave the floor to you, Rolf Eriksen, to comment on our outlook. Yes. As we believe that outlook is positive, especially for classifieds, we expect that the major sites will continue the positive developments.
Like I've said before, the Q2 is normally very strong, so you can't just take the growth rates achieved in this quarter and use as a basis for developments for all eternity. We continue to invest in new ventures. We see that the models we have designed work and that the competence we have work well. Again, there are many other good players.
Competition becomes gradually keener. We believe that we're doing well in markets and segments where we are focusing on. I would still like to say that we take a positive outlook on classifieds, but if you believe that things will just move forward in a straight line growth, well, that will not be the case. As for the media houses, we have great confidence in our media houses.
We will be the winners in the digital market, we will continue to maintain our strong print positions and also to invest resources in the competitions where we see fit. I also believe that print will also notice that we're operating in a tough advertisement market, and therefore, that margins will be under pressure compared with what has been the case in the previous years.
All right, these were my brief comments on outlook. I would like to leave you with this slide. It's been some time since we had our last investment day. We will have one in London and one in New York. The attention was very positive. Last year, we had an investor day in London, and we hope that some of you here will also follow us to London.
I'm not quite sure if the setup for London and New York will be exactly the same, but I know that Rolf Erik, Trond, and also Sondre here will be present, and we'll also have representation from classifieds, too. All right, that concludes my presentation for the day. Now we open the floor for questions.
Yes? Anuntis, how much did you pay for it? Did they want to sell, or were you keen to buy?
Well, in order for a transaction to take place, there has to be willingness on both the seller side and the buyer side. The exact transaction sum was EUR 290 million in enterprise value was what we based the transaction on. As for the agreement itself, well, I mean, this has been coming, the put and call mechanism, so that the González family wanted to wanted out.
We stepped up the plan. We agreed on a deal based partly of some of the intrinsic mechanisms. A couple of questions from the webcast from Jakob Birgmo from RAM in Stockholm. He would like to ask a question if about NOK 20 million in one-off costs in Schibsted Sweden. He would like some further specifications, if possible. In addition, he would also like to know if Schibsted Sales that have been moved out of Growth Media, if that would also have an impact on comparable figures for the second half.
Well, I mentioned briefly that the non-recurring costs were about NOK 17 million-NOK 18 million, half of Lendo, half of Hitta. In Aftonbladet, there's been a project ongoing that they've taken out some costs that didn't move exactly as to plan. In Hitta, there were some costs attributable to some customer contracts.
They tried to sort out the matter. As for Schibsted sales, I believe that that would have a declining effect on the comparable figures going forward.
Also from Niklas Dehning from JP Morgan in London. He would like to know if investments in online classifieds. Is there any reason why the quarterly investments should not be about NOK 240 million in the short term?
We have said that because of the competition, we will not actually announce how much we will be spending. It will be decided based on the site situation, also the competition and the competitive situation in various countries. I have a question about the Schibsted Growth Media, Tillväxtmedia, and some of the investments made in the sites that you already have.
Could you please tell me if the investments level, Tillväxtmedia, the Growth Media, are at the moment and what we can expect going forward? In the Growth Media, of course, customer acquisitions are important to build our positions going forward. If we take Sweden as an example, Kundkraft and Suredo are both companies, one in insurance and one in the power distribution negotiation. Of course, there are customers we invest in an initial Phase, and there are therefore, we operate at a loss of some NOK million before we move into a positive performance situation.
Lendo is doing very well, even for that side, we need to build up a position, build up a brand, and it costs. That's the type of cost that we are looking at. Then from time to time, there will be some acquisitions.
We also bought Fakturabörsen, but we are building up positions, and we have a long-term horizon. We try, of course, to take out margins in the short term. Preban? Thank you. I have a couple of questions regarding classifieds. Of course. In Spain, it would seem as if you have a strong growth in the advertisements in the Q2, then you also said that performance was slightly down in InfoJobs.
The question is, if you have already started to lower prices in order to increase volume, when did you have control of that site? What about Subito in Italy? Can you tell us, give us an indication of revenue growth in the quarter? In Spain, it is not until the Q3 that we will take over operations of that company.
As for traffic data, then of course, things may fluctuate. I don't see any major changes in the Q2 compared with underlying factors. For Subito, revenue has grown, but of course then that growth is based on relatively small or relatively low basis figures. I have a question linked to net financial items. You may have mentioned it slightly, Trond. There was a figure of NOK 64 million.
Could you please tell us what this is? Is it mainly increases in net interest-paying debt? That accounts for some of this. Net interest cost was slightly down compared with the Q1 of this year, so that there's an Agio difference, an Agio loss of NOK 35 million, or I can't remember the exact figures, but that can't explain that figure.
As I said, we don't have a full hedging, so these figures may fluctuate slightly. Atle, can you tell me what's happening around Wimdu? I mean, there's not much focus about it in your report. What is the focus for Schibsted here? Wimdu, of course, just to repeat the story. We had 44% stake, now we have directly and indirectly around 55%, along with Plate Company and Ferd.
We took control that was needed in order to develop the company further. We have achieved value growth, and we would like to see a development in a growth segment, and we would like to develop value in that company. In Norway, we're seeing a good customer growth. We invest resources in Denmark, some in Poland, and then we'll also see how things go.
Of course, Sweden is a challenging market because this is a traditional Spotify market. We're also taking some shares. We've had a new, very competent CEO, Chen. He comes from the video market. He worked with ventures and start-up companies for many years, and he joined us effective from first of June, and I think that he will be a very strong function going forward.
From UBS in London, Jerome. In real estate in France, you indicated that the agreement with Spir will be terminated by 2014. How quickly can you build your own operations in real estate, and how easy will it be to use the infrastructure that you have developed for other sites? I think that I will have to ask to come back to that in the course of 2014.
Of course, we are preparing for the termination of that agreement, and I don't really think that infrastructure will be a problem, but we need to have a sales force that are prepared to take over. Also from Jérôme Bodin , another question. Could you please give us an update of the competitive situation in Brazil and especially with Mercado Libre and one more competitor? OLX and Mercado Libre. How is Schibsted's strategy different? As for Mercado Libre, that is a well-established and large site with a broader footprint than we have.
It can more easily be compared with eBay, strong on auctions and payments, et cetera. We have the pure play generalist site for purchases and sales, more likely the leboncoin. That is more comparable to OLX. The margins between those companies are also more similar. Both companies invest quite a lot in their sites.
They are biggest in the capital area. We are biggest in the Rio area. There are some different competitive positions in the various parts of the country. Brazil is an emerging market and therefore it will take time before the Brazilians reach a GDP level on a par with what you see in Europe. We see a lot of interesting opportunities in Brazil, but also believe that both sides will help develop that market. All right. There doesn't seem to be any further questions. I would therefore like to take this opportunity to thank you for your attention and wish you all a.