My name is Kjersti Løken Stavrum. I'm editor in Aftenposten, which is the newspaper where pretty much of the Schibsted story started more than 150 years ago. I will host you through this day, which pretty much means that I have to do the housekeeping, which is the least I can do. That is to inform you that the refreshments will be found behind the door there, that the toilets are behind there. That was it. Our aim here today is to inform you, to educate you, and hopefully also impress you a little bit with all the things that we have going on. Let me first introduce our Chairman of the Board for the last 10 years, Ole Jacob Sunde.
Good afternoon, everybody. You will have seen from the program today that we will be focusing on our classified online ads. This makes sense because, last year, our classified online business accounted for more than half our operating profit while growing at 20%. Let me tell you, though, that it has not always been like that. 10 years ago, I was elected chairman of, Schibsted in May 2002. It was in the middle of the downturn after the dot-com bubble, and, online activities were out of favor. As a matter of fact, one of the first tasks that I had to address as a newly elected chairman was to reply to a letter from an international investor who proposed and argued that we should build fortress Norway. We should sell off all our online activities.
They weren't making much money anyway, and he was right, and concentrate on the stable and profitable newspaper business in Scandinavia, particularly in Norway. Of course, we should increase the dividend payment. Our only classified business in 2002 was FINN.no. It was having a turnover of about NOK 60 million, EUR 7 million to EUR 8 million, and making a modest profit. Instead of building fortress Norway, we decided that we should continue building on our online classified business. We launched FINN in Sweden without much success because we met fierce competition from a small Swedish startup called .
We decided, with the strong support from our management, particularly the Managing Director at that point in time in Aftonbladet, a guy called Rolv Erik Ryssdal, to launch an offer for Blocket, and we paid SEK 183 million for a two-man operation out in the farmlands of Sweden. Today, the 60 million of FINN has grown into a turnover of NOK 3.5 billion with the operating profit of about NOK 1.1 billion . The point that I wanted to make is a simple one, and that is that long-term business development is a must, and it has to be forward-looking. It must be based on the opportunity that lies ahead of you.
I think that we in Schibsted will also in the future have to support this business development, have to support the initiatives that we have taken, and that can be tested anew, just like in the wake of the bubble in 2001 and 2002. I see it as one of my major tasks to continue to support the development of our business and our innovation. However, since I'm talking to the financial community, I would also like to stress that we are very much aware of that success with new initiatives, that cannot be taken for granted. An important factor of entrepreneurship is to know that there is a risk of failure. Schibsted has experienced that. We have invested, and we have failed.
I'm sure that most of you are aware of the investment in Sesam, the Search engine that we launched in 2004 in Norway and Sweden, and had to accept that Google was too strong and closed it down four years five to years later. The lessons that we have learned over the years has been that you have to be keen on controlling risk. The way we do it is that we have strengthened the screening criterias for new initiatives, and we have also installed a very keen process of monitoring all our new initiatives. I can also stress for you that if innovation is a task of the board, so is the controlling of new investments. We seek growth, but we seek profitable growth. As our business has expanded internationally, I've seen the need to strengthen the board.
Since 2003, the board has consisted of Scandinavians, Norwegian, Swedish, Swedes, and Danes. We will now at the general assembly in May, propose to increase the shareholders' elected board members from six to seven, and two of those seven will be non-Scandinavians. We will also then switch from a mingle of Scandinavian languages in the board to European English accents in the board. Even though that we today will talk mostly about our classified business, I would like to remind you that Schibsted is much more than that. Throughout the years, I have been impressed by the management in many of our operating companies.
They have a keen desire to be best, to wanting to progress, to continuously challenging the status quo, so that in our companies today, we have a keen culture for change. This has led to many new promising initiatives in our media houses. This is why I firmly believe that there is a future for digital paid content. The path to get there may not be obvious. Some elements I think is important. The ease of access, the ease of use, the ease of payment. Content with quality and integrity, strong brand names, and multiple sources of revenues. There is today in Schibsted a multitude of initiatives to crack the digital code, and I think that these initiatives will lead to new opportunities for us.
Underlying all this, I think that in the future, there will be a need and also a willingness to pay for reliable sources of information. Somewhat simplified, you may say that Schibsted today, well since the days of Christian Schibsted in the 1860s, have been in the business of owning and operating marketplaces of information. We have today the unique advantage that we also in the digital area own and operate in several of the countries that we are present, marketplaces of information, digital marketplaces of information. Both when it comes to content and when it comes to advertising. Now I invite you to hear more about how we intend to promote further and develop our marketplaces of information in the coming years.
I will end by saying that from my perspective, we have the determination to stay ahead, and which is more, we have the competence and the financial resources, as far as I judge it, to back that determination. Thank you.
Thank you. 20 years ago, our former prime minister made a new year's speech where she introduced a saying that has followed us ever since, that it's typical Norwegian to be clever. That was not one of our proudest moments. You know you're in trouble when your prime minister tells you that you're good. For us in Schibsted, it's not enough to be clever. We are here to win. As you will see, I think, from some of the presentations that are coming here today. We have a vision behind here, shaping the media of tomorrow, today. I am a believer in content, so I will leave that content and substance part of that to our CEO, Rolf Erik Ryssdal.
Thank you very much. It's a pleasure to see so many of you here today. Some people are familiar with Schibsted, but there are also a lot of new faces. Hopefully, you have a good afternoon. I'll remind you that there's also in addition to the formal presentation and the Q and A sessions, there's also ample room to interact with management during the breaks and during dinner tonight. When you walk out of here today, there are three key points about Schibsted that I would like you to keep in mind. First, online classifieds. We are already among the leading international classifieds company, and we have set an even more ambitious target to become the number one player in this field globally. Second, our media houses in Scandinavia are in good shape.
They have a set of challenges facing them, but we're managing them very carefully, and they generate a strong cash flow, will be good businesses to own for many years to come. Thirdly, the combined strength of our online classifieds and the media houses will give us a unique opportunity to seize the Scandinavian online opportunity as new marketplaces move online. Let me give you a short overview of the group. Schibsted, the modern Schibsted is based on two cornerstones. The media houses. As Ulla K pointed out, we've been in the newspaper business for 150 years. Today, we call them media houses because they have a very strong digital presence online and now on mobile. I think we can say that we have managed that transition better than most of our peers. The second cornerstone is the online classifieds.
Now, we've been in this business since the inception. Coming out to Scandinavia, where the online revolution was, or the transformation started early, we know this business. We're industrial operators in the classifieds field. We have an interesting position, and we have further scope to expand. Today, we operate in 25 countries. Here's a short sum up of the financial performance of the group the last 10 years. It's been a turbulent decade for the media industry. Schibsted has, I dare say, fared well. The turnover of the group has increased from NOK 8 billion in 2001 to NOK 14.4 billion last year. As you can see, the margin has improved, EBITDA margin, from 8% to 15%. The reason for that is because of the digital transformation.
As you can see from the revenue chart, today, 36% of the revenues comes from the from online businesses. When it comes to the profits, it's 55% that comes from our online activity. The digital transformation has allowed us to expand our margins. The digital transformation has also given us the opportunity to expand internationally outside of Scandinavia. Here you see the footprint of the group today. Our main market is Europe. In France and Spain, we hold leading titles in free sheets, but the other activities outside Nordic regions are online classifieds. Main market, Europe, but as you can see, we've also experimented with some launches in Asia and more recently stepped up the pace somewhat in Latin America. I'll get back to that later.
Schibsted has a vision. The vision is shaping the media of tomorrow, today. To do that, we need to have the best people to attract top talent. I think we're fortunate enough in Scandinavia to enjoy a good reputation. Therefore, we have been able to attract a lot of very highly skilled managers and employees. I'm happy to note that more recently, we've also gained a reputation outside Scandinavia and have been able to attract some top management talent from to our international classify sites. You'll meet some of them here today. We have a culture based around the following values. Integrity. That's important for any big, serious operation. It's essential for a company coming from the news side. We are innovative.
Well, that's the tradition of Schibsted, and that's really the path that has led us to the progress that we made last years. I, when I say we're a team, this expresses that we are collaborating across the group, and that gives us a big advantage to share best practice between us. As Kjersti mentioned, we're here to win. It's a strong competitiveness in this. In all the markets we operate, we strive to be the number one player. That's our tradition, and that will continue to be so also in the future. Let me go more closely and talk about our different businesses, and I'll start with the Classifieds. We have already a very good position pictured by the base camp here. We have covered a lot of ground.
We have a very exciting portfolio with a lot of growth potential. We have set an even more ambitious target for ourselves. We want, in three to five years, to become the number one player. Here are the different levers that we can pull in order to achieve that goal. Our current portfolio, be it established organizations like Finn or Blocket or the others, has a strong growth potential in it still. All our sites, even the ones that's been existing for the longest time, continue to grow at the comfortable double-digit levels. We believe that there's a great potential in optimizing and sharing best practice across. Not many companies are in the position to do that. We will continue to invest in growth organically, as we have done in the past, and through greenfield investments, new launches, and selected acquisitions.
Of course, people ask us value creation, what do we want to become number one in traffic or in turnover? Of course, value creation is the ultimate measure for us. Why is it so? What's so attractive about the Classifieds business? I think this picture here tells a clear story. As you can see, here are a number of our sites and also another industry, a number of industry peers that we're not involved. It just shows you that there's an industry phenomenon going on here. You see Rightmove, and you see Auto Trader, familiar names here in the UK. My point really is that in the Classifieds business, it's a winner-takes-all game. If you're able to achieve a position that is much stronger than the number two player, then you can enjoy good margins.
That goes for us, that goes also for other players. Now you can understand why we talk internally about the importance of being number one, it's better to have one number onfour positions rather than to have four or five number two positions. Our task then, as the management, is to manage our portfolio to get as many number one players as possible. Here is a complicated picture, but Terje will tell you more about this a little later. This is basically an overview of our portfolio, it's divided into several phases. You see there's a startup phase just after we launch, hopefully in a year or two it moves over to attraction phase, where you have a stronger pickup in traffic and see the possibility of becoming the leading player.
Once you're in the established phase, that's when you're the number one player, you've taken the leading position in the market and are able to make profits. Many of the names here in the established phase will, of course, be familiar for you, FINN, leboncoin, Blocket, Anuntis , and InfoJobs. Let me point out that we moved also a couple of other sites through this cycle. It's Willhaben in Austria and Subito in Italy. I don't expect all these sites to succeed, but the important thing is to watch it closely and keep a close eye on the development. This is where discipline comes in. Because I think one of our advantages is that we're coming out of Scandinavia. Classifieds has been the big business there for many years. We're industrial operators.
We have many layers of management who know how to run sites. I think we have the ability to spot whether a site is performing well or not. Hopefully, if it's not, then we can take corrective action. Otherwise, we'll have to scale it down. This gives us advantage in several aspects because we can develop new concepts and share the best practice from site to site. We know how to generate traffic. We know how to build a brand online. Brand online is even much more important than the brand offline, of course. You shouldn't fall for the temptation to do quick and dirty solutions that will hurt your brand in the long term. From Scandinavia, we gained a lot of experience in monetization.
In monetization, we transfer the lessons learned from FINN and Blocket to leboncoin in France, to Spain and to other countries. As we do when we're establishing new verticals. Terje will get more into this, but my point is that we're doing this in rather controlled fashion. We're rolling out the sites, and we're seeing how are they performing as opposed to how we're supposed to perform after 12 months, after 24 months in terms of traffics, in terms of revenues, in terms of competitive position. I think that's therefore reducing the risk of the rollout picture. We are investing in new sites. Back in 2006, we acquired Trader Media and in particular, Anuntis and the InfoJobs in Spain.
They're the clear market leaders in Spain, but we also inherited positions in Latin America. Recently we accelerated the sites, especially in Brazil, where we have a job site called InfoJobs, is now the number two site. We also staffed up the Blocket clone called Bom Negócio, and that was really relaunched last summer. It's a very exciting market. It's early days, but so far it's doing well. Here's another example: DoneDeal. That's in Ireland. You may say Ireland is a small country. What we're seeing is that in some countries, the emerging leader is already so strong that it'd be too expensive to outcompete it. What we'd rather do is that we'll go in and acquire it and transfer our knowledge and help boost the growth.
You know, six million people, including Northern Ireland, might not be large if you're in UK, but coming from Scandinavia, and the Norwegian and the Swedish market, of course, we're used to also operating in small markets and making them profitable. Summing up the classifieds business, we believe that we have a very strong portfolio that will continue to grow. We've said that we expect the current portfolio to be set for an annual growth between 15% and 20% in the years to come. Top line. Last year, we spent NOK 430 million on investment, as we call it, organic expenditure, to build the new sites. The ones that I showed you move through the life cycles. Brazil, for instance, and Subito which are now above the line.
The reason that we've expanded our spending the last few years is because we think there are many interesting opportunities for us. What we've said now is that currently, for the current outlook, we expect that investment or that expense to be at a level of around NOK 500 million annually the next couple of years. That is what I say about the classifieds. As you know and see from the program, we'll get much into much more detail on that subject later today. Let's move on to the media houses in Scandinavia. In Norway, we have five leading titles. In Sweden, we have two leading titles. In total, we reach out to more than five million readers every day. We invest in quality journalism. That has been our tradition. We invest in product development.
That has paid off in the past, and I'm convinced that it will continue to be so also in the future. Our news sites have been good at the digital transformation and have market-leading positions online. That also makes them powerful traffic drivers and launch pads for new services. I'll get into more detail about that later. Now, the newspapers can be divided into two main categories. It's the single copy sold newspapers, and it's the subscription newspapers, each with a different set of challenges. Of course, the single copy newspapers are the one that has suffered a hard fall or the most dramatic change in circumstances as the circulation for those two newspapers have fallen around 10% the last couple of years. I don't expect that trend to reverse.
What we have been able to do is to compensate that, and they have delivered through cost measures and also price increases so that they've been delivering good on the bottom line. I think going forward, you'll see a continued focus on pro-product development and we're going to watch the cost base closely. The important thing and the good thing for these two newspapers is that they have digital position that most newspapers in any country would envy them. Aftonbladet is by far the leading one in Sweden, VG is by far the leading one in Norway. Online, these two newspapers have been profitable for many years. We're now seeing, after many years of web growth, we're now seeing an explosive growth in mobile. Is growing faster than the web ever did.
We're also taking advantage of these positions to experiment with user-paid products. Aftonbladet alone to a subscription has 130,000 subscribers to its paid products. Now for the subscription-based newspapers, the situation is much more stable. Circulation is going down approximately 2% per year, compensated by price increases. There's a lot of good product development going on. I believe that we started out, but there's still a job to be done on consolidation and to improve the operational efficiency by working more across. Also these newspapers, they have a different starting point when it comes to charging online because in a way, it's easier because what their task is really to convert their already loyal subscribers to paid products.
Like many small and medium papers are doing in the US right now. We're starting experimenting with that pretty soon. Advertisement market, I won't say too much about that. Of course, it's a stronger trend that is migrating online. I'd like to point out that in Scandinavia, print has a much stronger position than the rest of Europe. Now print advertisement is of course cyclical, but also hee the outlook is far better in the Nordic region than in most other countries. As the advertisers are moving online, I believe that we have a good position to take advantage of that. Right now is the mobile advertising that is growing fastest.
We have many sites, and we've actually been seeing good growth last year all across our online sites in online advertisements. To sum it up, for the media houses in Scandinavia, I believe they're in a good position. Of course, there's a lot of challenges, but we will follow them very closely. This is not a cash drain, rather the opposite. I expect them to generate a strong cash flow for a number of years to come. I can assure you also that, as Didrik will point out later, we will watch them very closely. I think everyone that knows who works in those newspapers knows that a healthy development, and that's including profit margins, is the best guarantee to have a prosperous future. So much for the media houses.
Let me talk about the third main activity, which is the Scandinavian online opportunity. We have media houses, we have online classifieds. Together in Scandinavia, that gives us a tremendous strength in terms of online traffic. In Sweden, for instance, we have five of the 10 biggest sites in the country. In Norway, we have two of the three biggest. We've already used that to launch many new things. For instance, Aftonbladet online helped build Blocket as the big classified site in Sweden. Together, they built Hitta. Now they're building new online services, notably personal finance. We've done this in a systematic manner, and where we have a clear advantage compared to other players. There are many marketplaces that are yet to move online. A very interesting one is, for instance, personal finance.
In the UK, you have the MoneySuperMarket. MoneySuperMarket is a marketplace for financial services. That position is not really taken in the Scandinavian countries for various reasons. We are now moving to see what can we do. In Sweden, we have a site which is growing rapidly and also very profitable already. That's kind of the marketplace for consumer loans. That's a rather small site that we acquired. We have boosted the traffic so that they're able to convert that traffic into higher profit margins. I believe in Sweden, we can also make a marketplace for insurances and mortgage-based loans. In Norway, we have recently launched a service called Penger.no. That actually means money. no.
That is based around FINN, so that when people search for a house, they can also apply for financing. Different banks will offer their alternatives. These are still early days, but I believe that we have the traffic and the type of sites where we can adapt these businesses. The way we do it, spend a minute on that, is it's actually quite sophisticated because in Scandinavia, we have built what we call traffic funds. You see here all the big established sites we have, VG, Aftonbladet, FINN, and Blocket, they're pooled together, and they are incentivized economically to drive traffic to the new and coming sites. So it's an economic system, and it works. Once we drive the traffic to the smaller sites, they are able to convert them into higher-margin business.
It's all managed, from, from the top level. This has worked successfully in Sweden for a couple of years. We're now trying it out in Norway as well. Another point that we're going to focus more on in the years to come is the payment side. Sverre will get much more into detail around that later. What I can say is that it's important for us to be able to facilitate, getting access and paying for online subscriptions, products from our newspapers and our news sites. We have already developed a system that will facilitate, make it safer and better and easier to use the payment, parts of the site.
Now, of course, if you look at the economic potential, the other things we're looking at is the transactions taking place around our marketplaces, so around FINN and around Blocket. What we're doing there is developing a peer-to-peer payment, and Sverre will tell you more about that later. You know, it's early days. I think it's a good potential. What I think is around our classified sites, we can, in particular, but also the online sites, we have the traffic to develop a lot of these new services in Scandinavia and take those exciting positions. To sum it up, all up, for the media houses, they're prosperous. We're going to manage them well, watch them very closely.
They're going to be both good products, good businesses to own, and we're going to, and thereby will generate a good cash flow for many years to come. We'll seize the digital growth opportunity with the combined forces of the media houses on the online classifieds. We've proven already that we can do it, and we'll continue to do so. Not least, we have a great ambition in online classifieds. We are already a strong player in many markets. We'll continue to expand. We see many interesting opportunities and we've set the ambitious targets to become the global number one. By doing all this, we intend to shape the media of tomorrow, today. Thank you very much.
Thank you. Let's take some time for questions. Please wait for the microphones, by the way, before you start asking. Anyone? Everything clear? Yeah. Okay, I think.
Okay. There's a Q and A session later on as well.
Yeah. We have several questions here.
We're happy to answer any questions. Yeah.
Okay. Thank you, Ryssdal. What were the Norwegians doing before we launched FINN? Everyone knows that. We were sitting indoor. We were freezing. We were being more and more aggressive, and then we went out and stabbed our neighbors. The crime rate has actually gone down in Norway these days. No wonder why. I think the figures you will see tells you why. The next presenter launched FINN. He is now the CEO of Schibsted Classified Media. His name is Terje Seljeseth, and he will give you the broad picture of the classified story. Please welcome.
Thank you, Kirstie. Yes, good evening, everyone. Our CEO has already told you about the ambitious target. It is indeed an ambitious target. I can tell you that the organization in SM really believe that we are able to reach this target. That is actually what I'm going to tell you about today, why we believe we are able to do this. Before I go there, I talk to a lot of people, actually, even investors, that still believe that online classifieds is very much about migration. True, it is about migration, but much more than that. This chart shows actually that FINN in Norway was able to overtake the total revenue in the car classifieds in the late nineties from Aftenposten. The by far biggest Norwegian newspaper and very dominant in the classified market.
This is migration, no doubt about that. In addition to that, FINN was actually able to have new revenue sources. They developed a market for private to private to sell used consumer goods to each other. Today, the revenue from this market is huger than the total classified re-revenue in Aftenposten back in the late nineties. I could go on and tell you about all these kind of new revenue sources that a classified online classified site could achieve. I will not do that today. We have Christian and Olivier, and they will tell you more about this later. I will mention one thing. FINN was established in 1999, at least as a separate company. It was a dominant market leader in 2003, 2004. Still, after eight years, it continues to grow.
Talking about migration, we have another migration going on. The mobile migration. It's very strong, actually stronger than what we saw in the internet from the internet growth early in 2000 and 2001. This is from Blocket, and we can see that 25% of the traffic in Blocket is now coming from different mobile devices. This is a migration that Blocket has handled rather well, I would say. We think this is a very important opportunity for us because we can see that in less mature markets than Sweden, we really can use this tool to educate the market and penetrate the market faster than now. Okay, back to why we really believe in this ambition. Well, it has to do with history, that's for sure.
We have a long history with the startup of Finn. There is something about Norway and Sweden. To be able to start Finn and also Blocket in these two countries is a very large opportunity for us. Because Norway and Sweden are always ranking very high in all kind of technological indexes. The highest internet penetration in the world, among the highest mobile penetrations in the world, a very high PC penetration, and I could go on. In these very mature markets, we have been able to build these sites, Finn and Blocket. I think that is really something we can use when we move into more immature markets. We have done so. This is the history of growth in Schibsted Classified Media. It's a rather steady growth, both, as Rolf Erik mentioned, from acquisitions, but also organic growth.
We hope we can convince you that we are able to continue this growth in the future. I will tell you a little bit about our present position and how we are actually planning to develop that. This is the number of page views in all the sites in Schibsted Classified Media. As you can see, Craigslist in the very large mature US market is larger than us, still. We are larger than some of the other competitors, eBay Classifieds and Naspers. If we had looked at revenue, eBay Classifieds would probably be number one, but we would be number two. How are we going to develop this further? I think it will be useful for you to understand our creating winners pipeline, how we actually develop our sites and the different phases we divide our sites in.
The first phase is the prelaunch and launch phase. We have a two-step model. First, we analyze all the countries around the world, and if we can see some promising markets, we launch a test site. We conduct a series of experiments in that test site before we even think about launching, transferring it to the startup phase. If we can see good results from these experiments, we will move it to the startup phase, where we really start to invest. This is a very critical phase. If we succeed in this phase, and we have very specific strategies for doing so, we will move it into the traction phase. When we move a site into the traction phase, it's typically, moving towards the number one position in a specific market.
Of course, if it moves into a very clear number one position and is profitable, we move it into the established phase. All these four phases are connected with very specific strategies. They are all supported by specialist centers around the world. We have a team in Stockholm that is only working with the pre-launch and launch phase. They are specialists in analyzing markets and launching test sites and conducting experiments. We have several competent centers around the world that support the other phases. We have a large development center in Madrid. We have mobile development in Singapore, and we have different hubs around the world that support business development and strategy development. In Oslo, we handle the whole best practice sharing program and capability building program, which is very important for us because our sites are very autonomous.
They have to be if we are going to succeed in the local market. Again, it's really, really important to have a systematic approach to best practice sharing and capability building. As I've already told you, systematic strategy implementation. We have some predefined processes that we use all around the world. Coming from a newspaper company, we even have these procedures documented in, on paper, actually. Okay. I thought it would be useful for you to understand how the cost base is actually in this picture. It's especially important for the first phase, I think, because it's a phase that don't need a lot of investments. We launch this centrally from Stockholm, and the test sites are not something we need to invest a lot in.
All these sites will not cost us a lot of money, and we can launch a lot of sites without spending a lot of money, which is important for us. When we decide to move it into the startup phase, then we are really starting to invest. When they move up to the traction phase, well, some of them are actually approaching profitability, so the picture change again. It's a medium cost picture for most of these sites. Of course, in the established phase, they are profitable. Rolv Erik mentioned this, to handle the portfolio of sites is very important for us. I wish I could tell you that we will succeed with moving all the sites we have in the launch, startup, and traction phase into the established phase. We will not succeed.
Not with all of them. Now and then, we will even have to move a site from the startup phase and back to the launch phase, which we did in Greece, for example. All in all, the picture is that we are moving sites towards the established phase. Lately, we have actually moved CustoJusto and Jófogás from the startup phase into the traction phase. We have moved Subito in Italy, Willhaben in Austria into the established phase. We have supplied the phases with Tocmai.ro And also, as Rolv Erik mentioned, DoneDeal in Ireland. I can assure you that we can see quite a few sites in the launch phase that could be moved into the startup phase. Just show you the development in these sites that we have moved.
CustoJusto in Portugal and Jófogás in Hungary, we moved them into the traction phase, and you can clearly see the black line here is moving into a number one position. We moved Subito and willhaben in Italy and Austria into the established phase. You can see again the black line that we are really moving into a clear number one position. I think we have actually long experience with seeing when we can hit the home run, and we can use that knowledge even in the pre-launch and launch phase.
Well, what is the upside? This shows the revenue per internet user in FINN, Blocket, and leboncoin. If we are able to move leboncoin closer to the revenue per user that we have in Blocket, the upside is huge. If we should succeed with this also in the other countries that we have sites in l l ike Brazil. Well, you have Excel sheets, you can do the math. Thank you.
Thank you. We will have a Q and A session on classified in a little while. We Norwegians, we like to think that we are all over the place on all the important arenas. The problem is that we are so few, great things are about to happen. In the next two weeks or so, we are going to turn five million people, which I guess you will notice when it happens. The thing is that none of them, probably, will be named FINN.no. FINN.no does not only mean find in Norwegian. FINN.no is a traditional Norwegian name, and it's a fact that a lot of people was named FINN.no before. No, they're not. I think that's the short story of what happens when you turn a name into the most known brand in a country.
The CEO of FINN.no Norway, Christian Printzell Halvorsen, will tell you about this great story.
Well, thank you, Kjersti, and good afternoon, everyone. I'm happy to be here and spend the next 20 minutes or so, talking about FINN. As you've all heard, FINN is by far the leading classifieds portal in Norway. I think FINN can serve as a good example of what the other sites in the Schibsted portfolio might become one day in the future. Also, I think, and this is something I'm very enthusiastic about, is that such number 1 positions have a great potential in themselves, and we see some great growth opportunities going forward. I will give you some examples of that. From my presentation, I hope you take away 3 things.
First, I want to share a little bit about our very, very strong position in Norway, especially for those of you who are not from Norway. Secondly, I will go into the future growth per-prospects, I will talk about what I see as very exciting things, both within the established markets that we're already in, but also how we're thinking about establishing new markets and building those to become number one, also how we see good growth opportunities within mobile. Lastly, I will spend some time talking about how we are working on building an innovation culture to sustain this growth going forward. Let's start with FINN's quite impressive position in the everyday life of Norwegians.
As been said here in the introduction, FINN is a household brand in Norway and basically everyone knows what FINN is. Actually even more impressive maybe, is that very many people have a hard time naming any of our competitors. Over the course of one week, we have somewhere between 2.5 million and three million unique visitors out of the population of now five million Norwegians. If you add up all the visits to FINN over a whole year, and these are, 2011 numbers, every Norwegian on average visits FINN just under 100 times and spends more than 18 hours on FINN.
If you take all the goods advertised on Finn and sum up, the value of these goods, it's actually more than NOK 500 billion or more than 20% of the GDP in Norway. These are quite substantial numbers in itself. I think the reason because, the reason behind us having these, very, very strong numbers is that we are in the lucky position to be number one in all verticals, more or less. This is a position very few classifieds players in the world, have today. You can see it here, how, we have very, very strong positions in all the verticals and also very high market share in most the markets.
This is, shows very well what Rolf Erik was talking about in the introduction, how these are winner-takes-it-all models. The only two positions where we don't have the leading, where we're not in the lead is travel, which is a much more fragmented market, and also services for craftsmen, which is a very newly established market, which I will come back to and talk a little bit more in detail. Even in display advertising, which is a very competitive market, both with the local, national, and international players, Finn is the number one in Norway, taking about a quarter of the online display advertising revenues. Of course, having all these positions in Norway translates to very, very strong financials as well.
We have over the years delivered steady growth, I would say, and strong, stable margins. Just the two last years, we've had on average an annual growth of around 25% and EBITDA margins of around 45%. We will, in the future also strive to, of course, continue this growth because we consider ourselves a growth company and continue having these high stable margins. For those of you who are not Norwegians, these absolute numbers might not give you a good impression of the, of the position we're in. I thought, well, let me compare to something that you do know. I thought, let's compare to Google's position in the US advertising market. This slide shows the per capita revenues and profits for FINN in Norway and Google in the US As you can see, they are very comparable.
Norway's position in the Norwegian online ad market is very comparable to Google's online dominance in the US market. I think these kind of marketplaces have the potential to become such strong players as this. Let's go into 2011 a little bit more in detail because that was the most recent numbers that we have. I was pleased, but not surprised to see that we managed to grow in absolutely all the verticals, from the established verticals such as real estate, jobs, and cars on the right-hand side, to the newer verticals such as travel and services on the left-hand side. Particularly, jobs saw a very strong market in 2011, growing from NOK 220 million to almost NOK 300 million.
If you see the overall growth drivers last year, there were basically, three. First, we saw continued volume growth, in all markets. Of course, particularly the more, the newer verticals were percentage-wise stronger in volume growth, but also jobs and cars saw quite a strong volume growth. The second growth driver in 2011 was price optimization. That was more or less, only jobs where we saw that. I'll come back and talk a little bit more about that. Lastly, we had new and improved products. There was a whole range of new products that we introduced in the all the different markets. Just one example is, better, targeted advertising.
Display advertising is a good example, and retargeting, and a multitude of other things. Let's spend most of the time now talking about the future and where we see some very exciting growth areas in the future. We in the management team in FINN have defined these five areas to be the things that we will focus on. The first three are basically the growth areas, and the last two are enablers. First, we see a huge potential still in optimizing the existing marketplaces that we are already in. Second, we think we have the capabilities, the brand, the traffic position, and so on, to establish and build entirely new marketplaces. Number three, mobile has already been mentioned here by Terje. We also see very exciting opportunities within mobile.
Number four, we have created an exciting vision that we call the Marketplace Graph, which I will describe a little bit more in detail later. In essence, it means that we, in the future, will know the user's order of magnitude better than we do today and can use that to create better products. Fifth, but not least, we think that our core competencies, sales and innovation, are areas that we will improve to become world-class in. I will talk about innovation here. Let's dive into existing marketplaces first. There are three things that we see that we can do in the existing marketplaces. First, it's price optimization. The work we have done within jobs shows that there is a huge potential in being more sophisticated in working with pricing.
It doesn't mean that we will do this overly aggressive, because as Rolv Erik said in the introduction, classified markets have very strong network effects, and we need to defend those network effects as well. That means that in some places, we will increase prices. Some places, we might decrease prices to increase volume. Small rental apartment is one example of a place where we'll probably decrease prices. We will work on enhanced contract structures, which is basically what we did in the job market, meaning that we will make sure that our business customers have the right discount level.
The third example I just wanted to give here on price differentiation on the pricing is price differentiation, because we see that we have the opportunity to introduce lower-priced product to have a, an easier step in and higher-priced premium products in order to use the whole price curve better. We will work quite systematically on this going forward. The second area we see is subverticals, and I'll just give you one example of this. Within real estate, we have spent so much time and effort working on homes for sale, monetizing that vertical, that we have under-monetized some of the other verticals.
For example, property projects and new homes is one area that we have so far, we had a per project business model, and we're now conceptualizing an entirely new product around new homes, where we go from per project to per unit, which is a completely new business model with a very interesting potential. We're looking at the same kind of things within the motor verticals as well. The third area that we will work on within the existing marketplace is just product upgrades because the pace of innovation in the online space is just so rapid that, of course, we need to always be on top of what the consumers expect from a marketplace like FINN. These five areas here are things that we will focus most on.
Personally, I believe strongly in personalization and customization and also better targeting. These are things that have high focus. The second area after existing marketplaces is establishment of new marketplaces. We think we have the capabilities, both in terms of competencies, brand positions, traffic, and so on, that we can build, launch, and make new marketplaces into number one positions. This is not something we haven't done before. We have done it before. We did it with travel in 2006. We did it with FINN oppdrag, which this is a screenshot from in 2010, and we did it now this fall with Penger.no in 2011. I will spend some more time now talking about the last two, FINN oppdrag and Penger.no.
FINN oppdrag is what we consider our platform for growing into the entire services market. We started with craftsmen, and we started with a model which is very similar to what you have here in the UK, MyHammer. It's essentially a product where you buy a Yellow Page listing as a craftsman and a subscription to receive job offers. For consumers, it's a free service. Already, after one year or a little bit more than one year in operation, we are now tied for the lead in this market together with another Schibsted service, Mittanbud. This is looking very promising. I think actually the most important or the most interesting part of this graph is this down here.
The lower, the light blue line almost at zero, which is the traditional Yellow Pages player, Eniro, in Norway. They have absolutely no traction in this market whatsoever. This, I think, is something that will be quite disruptive for these kind of players going forward. We also see a strong growth in this market. The second example was also mentioned by Rolv Erik, Penger.no. This is, as he said, a service similar to MoneySuperMarket. It's free for the consumer to go in here and send an application to several banks at once for a mortgage loan. The banks pay on a per lead basis. We started this out of the assumption that we have what it takes to build this market.
As I mentioned, we have goods on FINN for more than NOK 500 billion. We know that a quite substantial part of this needs to be financed, needs to be insured, and so on. We know we have very strong traffic positions to drive traffic to this. We are cooperating on VG on this as well, and they have strong traffic. VG also has the reputable print magazine, Dine Penger, which is a personal finance magazine that can provide credibility to this site. This is how we are thinking about building it. It was launched this fall, so it's very early days still, but it looks promising and we're growing the traffic week by week.
Now in the next quarter, we are launching car insurance as well, and we think probably that the traffic will accelerate by then. Those were two example of new marketplaces, and we will launch even more in the future. Then over to mobile, Terje mentioned this as well. These are our estimates of how we see that mobile traffic will grow in the future. Basically, we think that most or all the traffic growth in the future will come from mobile devices. We think that in 2015, and probably earlier, more than half of our traffic will come from mobile devices, including tablets. We're already at 17% today, and it's growing at a pace of around 1 percentage point per month.
It's a very rapid transformation over to mobile devices, and this will have exciting opportunities. I'm completely certain of that. Of course, there will also be some risks as there always are in such transformations. Because of that, we have defined mobile innovation to be our number one priority. Already we have launched quite a few mobile products. We have adapted the regular desktop service to be better on iPads and so on. We have launched a completely new built from the ground up mobile web. We have launched a iPhone app for ad insertion. Next out now, within the next quarter is an iPad app. That's very important because we see stronger growth from the iPad than we do on the mobile.
It's not so strange actually because Norway has very strong iPad penetration, roughly the same number of iPads in Norway as in Sweden, but with only half the population. This is a product that I'm following very closely, and it looks like it's going to be a great product using many of the features of the iPad, nice high resolution pictures, maps, and so on, and we will also introduce some new and exciting ad formats in this product. After that, we also have other products in the pipeline, iPhone app, Android app, and so on, which we'll launch in the time to come. The fourth area is something that I think is very exciting, and it's a vision that we have called the Marketplace Graph. Today, we know too little about our users, I think.
As this shows, we basically know that the user sells something. In the future, I believe that we can know much, much more about our users. Facebook coined the term the social graph, meaning the mapping of everyone, their friends, their likes, and so on. We have borrowed from that and talking now about the marketplace graph. I think we can map out all the users, all the goods, all the services that interact in the marketplace and use this knowledge to create much better products in the future. If we know what kind of car you drive, we know where you live, we know where you go on vacation, and so on, we can use this to be very targeted.
For example, if I have ordered a vacation a plane ticket for two adults and two kids, we can be more than 90% certain that I represent a family. When I then go into the car vertical or the real estate vertical, why shouldn't then that vertical be more customized to me representing a family? I think it should be. That is this vision. The fifth area is something I am very enthusiastic about. It's innovation. If we are going to achieve what I've just been telling you about, we need to build a very strong innovation culture in FINN. It is something that we have done for many years already, and we are continuing on this work.
It's on one side, it's about, being systematic in organizing best practices, creating innovation tools, and so on. On the other side, it's more culture and things like organizing, innovation hackathon days for the developers, organizing FINN Awards, which celebrates the best innovators, incentivizing innovation strongly. It's also about opening up to the outside, and this is something we are experimenting more and more with. Opening up for customer-driven innovation, opening up for, like in the FINN Sandbox initiative, letting our employees become entrepreneurs based on the platform FINN can provide. Those are some interesting things within, innovation. I believe that we need to focus on organization culture to achieve our goals.
That's why my proudest moment last year was when we were awarded Best Place to Work in Norway because we had worked on this for several years. We have been among the top four companies in Norway for the last six years, and last year, we became Best Place to Work in Norway. I Rolv Erik introduced by with the notion of attracting talent. If we are going to achieve our goal of being the best marketplace in the world, we also need to attract the best talent. I think having an exciting and inspiring workplace is key to attract the best talent. That was basically what I had to share with you.
I hope those of you who are not from Norway now can appreciate the kind of position that we have in Norway, and that this could be an example for what the other sites might become one day in the future. I hope you share my thoughts on the exciting growth opportunities, both within existing marketplaces, the establishment of new marketplaces, and mobile, which is top priority. I hope you see our goal of also being a innovative culture and a high-performance culture. Thank you. I will be happy to answer any questions in the one-on-one session afterwards and during the breaks. Thank you.
Thank you. All of these presentations are, of course, about presence. With the figures, the companies, everything is about our presence. When there is something present, something is absent also. My question before the next presentation is: where are the French? We know that the French people have a tendency to walk out in the streets to demonstrate, throwing stones, making revolutions. Where are they these days? You would suppose that they would do the same thing considering the few economic backdrops also in France, but they're not. Bear in mind this question when Olivier Aizac comes to the slide number 14 in his presentation on Leboncoin. Please.
Thank you, Kjersti. Good afternoon, everyone. We have talked a lot today about the journey from a startup to a profitable company. This is something I can probably illustrate with what has been done over the six last year in France with leboncoin. Leboncoin starts from a simple idea. The good deal is just around the corner. That's why we have chosen to put this wonderful map on the front page. You click on your region, and you find what you need around you. This is based on a proven concept called Blocket. That is the leading classifieds website in Sweden for many years, and that has been adapted and launched in France in April 2006, six years ago now, on a market that was already very mature and very competitive.
Six years later, what we can see is that we have reached a 40% Internet penetration. We have passed 18 million ads online. Every month, we measure six billion page views on the site. Why these figures? Why page views is an important indicator for us? Well, our duty is to give as much visibility as possible to the goods that are proposed by our users on the site. Page views is probably the best indicator for this. This leads to very strong position, actually number one positions, in the main verticals in classifieds world: cars, real estates, and consumer goods. Back in 2006, the French market was already quite dynamic with some historical players and also some worldwide players.
eBay was already very strong on the French market among the top 10 websites on the market. leboncoin was nowhere at that time. It took us three years to reach the same level as eBay in France. Today we are, once again, in terms of page views, meaning the efficiency we are delivering to our users, six times as big as eBay in France. This is from a global point of view. Shall we have a look to verticals? Car is a good example of this. Today, on the French market, 75% of used cars proposed online are proposed on leboncoin. Number two player proposed a 1/4 of what leboncoin is proposing to their users.
This has been done regularly over the years with a steady growth that is still really present, starting from nowhere back in 2006 to more than three million unique user a day. On a monthly basis, 1/4 the French population is now visiting the site. It's the answer to your question, Kjersti. We are not demonstrating in the street anymore. We are browsing for good deals next door. It's not only a story about classifieds. It's also a story about internet in France. If we have a look at what Google is showing every month by measuring the page views of the different websites, leboncoin is among the top 10. If we have a look to what are the other sites.
We have all the major player, meaning the worldwide player, the Facebook, the Google, the YouTube of the world, and we have the main French ISP that are controlling the access to the web. leboncoin is this little thing, not that little anymore, it used to be six years ago, that has a strong position as a media in the internet world in France. This, of course, we have built like strong positions in terms of traffic and in terms of use. This leads to some significant figures also in terms of revenues. Over the last three years, the growth has been very steady, jumping from a little less than EUR 20 million two years ago to over EUR 60 million last year, with, as you can see, very high margin in the meantime.
This is one of the effects of jumping from the startup phase to the more established phase, as we are a light and agile company, focusing on the product and really developing what is important for the users and hence creating value. leboncoin is not only a story about big figures on the web, about revenues that start to be significant. It's a little bit more than that. We do love social discussions in France, as it was mentioned. What is good to see is that and to jump on what Christian was saying, about FINN.no, leboncoin is also a service about everyday life. It is today the most known brand when we are talking about classifieds. eBay used to be this one, of course. We have overpassed eBay.
Everybody, everybody has in mind that for classifieds, leboncoin is the solution. And we are in a phase where this brand starts to be a common name and, as people are googling each other, the solution to sell product on in France is a lot about post your ad on leboncoin, of course. This generates lots of clippings in the press. Why these slides, you will say. It's to say that it's not only about the success story that leboncoin has been through over the last few years, but it's also because journalists have identified that leboncoin, in, on the French market is a sign that the way of consuming is changing.
Yes, it's crisis time, and a used product is a way to make good deals and to find what you're looking for at a cheaper price. It's also based on the fact that people are more concerned by the environment. Recycling is very important, like solidarity, is also a keyword that is used a lot by newspapers to talk about leboncoin. It's more than just a business and a solution proposed to users. It's something that really echo what consumers are looking for now, a new way of consuming. As a matter of fact, what people are looking for on Google now, it's. Well, of course, it looks like very normal search for Google. It has probably be cleaned from what cannot be shown on a slide.
The good thing on this is that, yes, it's lots of big brand, arriving top of the list, for what is searched on Google in France. The good thing is that leboncoin is a reason to connect to the web. I go on Facebook to keep contact with my friends. I go on YouTube to watch some video, and I go on leboncoin to search for real estates, for cars or for goods around me. It's really into the daily life of Internet users in the French population, and this is probably one of the biggest achievements. It's not about building a business. It's about building a reflex and helping people to in daily life and in operations that are a little bit stressful. Looking for a new flat is not easy.
Looking for a new job is definitely not easy. Looking for a new cars, it's more fun. It's always important moment of life and being the reflex for this is, of course, something that we are very proud to have achieved. How did we get there? Well, you had some hints of this in Terje's presentation earlier today. Leboncoin is not coming out of the blue. Leboncoin is the little sister of the winning classifieds website in Sweden. That's definitely a big help because Blocket was not only about a business, it was about a concept, and it was about some key principles that have been transferred when the site was launched in France.
To resume this in a few words, first thing, Blocket, gave us 12 years of experience fine-tuning their product to the needs of their users. The software we have inherited, has benefited from those 12 years of experience. In the Internet world, 12 years, well, it's almost the entire Internet history. Based on this software that has been fine-tuned and polished over the years, there were like some key concepts that have been also transmitted to the team in France, and this is a little bit our Bible and what we do believe in and that are applied in the different startup launched by Schibsted and all the Blocket clones around the world.
To come a little bit more on those, first thing is we should propose products that are easy to use. You have seen, everybody's a winner on leboncoin. I just have to click on the region I'm living, and I get results for my search. Why so? Just because leboncoin is a product that addressed itself to the broader audience. It's not a product for geek, it's not a product for Internet experts. It's a product for each and everyone, and it should be easy to use. The second point is proximity. Classifieds have always been proximity media. It used to be in local newspapers. It used to be a little paper I was putting in the bakery next door just to tell that I was looking for a babysitter.
It used to be a paper I was putting on the back window of my cars, so that my neighbors could know that I have something to sell. leboncoin is once again based on this concept. I look around me, and I will find the good deal around the corner. Third point is to propose something that is simple. The content we are proposing, we do not build it. Our users are building the content. That's why focusing on having a very easy way to post ads on the site. Very clear rules, no tricky questions, no subscriptions, no payment. We're for free. All this make the user experience really, really easy and guarantee that we have as much content as possible. It's the only thing we have to propose, the content generated by our users.
This links directly to the next point. As by definition, our users are not professional ad writers. They are individuals, and when they sell their cars usually they want to say, "I'm selling my car," which is probably good, but not good enough. If we do accept this kind of content, the reaction of the users won't be, "My phone is not ringing. Of course, my ad is so poor that no one is interested in." The reaction will be, "Leboncoin, I've tested, doesn't work." Quality has been since day one, a real focus. Just to say that we have a duty versus our users. It's to make the ad as appealing as possible. All ads are reviewed before being put online. This goes also for the contacts that we are sending to the users.
Of course, when you're posting an ad on the classified sites, the goal is to have your phone ringing or to receive emails, but probably not to receive Nigerian letters or fake requests for your product. Quality goes also into lots of knowledge on how to build efficient filters to send efficient contacts to our users. Last point, as I was mentioning it earlier in the presentation, the service we are proposing is to give as much visibility as possible to our users. What the Blocket concept knows very well is to give as much impact as possible. The Blocket concept is probably not the best for accurate search, but we have all experienced this situation where you enter a shop because you want to buy a certain type of product.
When you check what you have in your bag when going out of the shop, well, you don't have only a trousers, but you have two pair of socks and a hat and whatever. The Blocket concept is also working a little bit that way. You enter for a house and then you realize that next to your door, there is this little dog that is so nice and your little daughter will be so happy to have it. You give a call for the dog, and you forget about the house. Those principles are really the basics of what the Blocket concept is all about and what we have applied by the rule when launching the site in France. Just because it's not about making a coup.
You have heard earlier in the presentation that it was a lot about industrial vision and that classifieds was really part of the newspaper's business. It used to be the ugly duck of the newspaper's business. Now it's the shining star. It's anyway, part of the DNA of a media company. Applying those key principles by the rule is the guarantee to build a long-term business and to have something that is sustainable in the long run. It doesn't mean the industrial doesn't mean that we have to be heavy and slow. It means that it goes through some important decisions, one of them being to keep an entrepreneurial spirit within the different teams.
leboncoin is a company that control all the aspects of the business, meaning the developments, the sales, the product management based on what the French market needs and based on what the users are asking for. Just a few slides on the perspective. leboncoin is not a small company anymore. We will be almost 150 people in the company by the end of this year, sorry. With a step-by-step vision, really focusing on the product first, just because it's what the users needs, and then building up new lines of revenues and strengthening the back office and strengthening the sales departments. Why so? Because classifieds business, it's not only about making revenues with classifieds. As we are among the top 10 website in France, it's also making revenues with advertising.
It's also, as Christian was mentioning it, striking deals and partnerships with insurance, bank company, just to have a better user experience and to create revenues around the service we are proposing. It's also targeting different type of customers. Individuals, of course, but also professionals. Car dealers, real estate agents, that have special needs, and we have to adapt the product we are proposing to those specific needs. What the company is in now is to develop a pattern of revenue lines. Internet world. Internet is not the end. Christian has told a lot about what FINN.no was doing in the mobile. France is definitely not as advanced as Norway in terms of mobile penetration.
We have taken a little bit more time to develop what was needed, but it's definitely also the new frontier for us, with clear goals is to build position as strong on the mobile as the one we have on the web. The first stone we have built on this is to launch the iPhone app. It was launched in December this year, so probably two years after all the sites have launched their app. Within one month, leboncoin has passed the 1 million downloads and is among the top 10 app used in the French market. Definitely we have here new challenges to build on and new perspectives, not only on the web but also on the mobile.
Just to wrap it up, this presentation was really aiming to show you that the journey that was mentioned in the former slides can be done in a successful way and that even on mature and competitive markets, applying the Blocket concept and deploying what has been known for years in Sweden, can be really successful. Thank you.
Thank you. We have prepared for a question session now. If there could possibly be anything more you would like to know on classified, please come up the aisle. Yes, please state your name and institution when you get the microphone.
Thanks. It's Ian Whittaker from Liberum. Two questions. First of all, just in terms of the move to mobile, you know, obviously you see great opportunities there. I just wonder what you see as the potential impact on your margin if more of your business does move to mobile because obviously if you are gonna transact more of it through the iPad there and the iPhone, there will be a giveaway there to Apple and other operating systems. The second question is more of a general one, which is how much threat do you see from the likes of Facebook to your business?
One of the things that the agent or some agencies are suggesting is that essentially users are moving from branded websites such as your own over to the likes of Facebook to actually make these sorts of transactions, with the argument being is that actually as well as the sort of transactional element, there's also a social network as well that they can utilize on Facebook that maybe they can't use on branded websites. I just wondered whether you see that as a threat, and if you do, sort of what steps do you think you can take against it?
Okay. Christian.
Well, I can start. First, with respect to margins and mobile, I just want to comment that in our model, Apple does not take 30%. Because we are using this, the ad insertion, either from the web or through our mobile app, and it's an SMS service, we get 100% of the revenues. We will not be impacted by that. In the overall level, we will keep the strong, stable margins that we have today, I think. With respect to Facebook, I don't see it as much of a threat for the classifieds business per se because I think that is better handled by a more specific search service like FINN.no and Blocket and so on.
Where I see potential competition both, well, already and in the future is display advertising because, of course, Facebook and the likes can be very targeted in their advertising. That is also why we have made the vision of the Marketplace Graph to become even more targeted in the future.
Terje, do you feel anything more.
Yeah. Yeah, I can add that. I think we see that there are some revenue streams that will continue to be only on the web. They could, of course, decrease. Then we have some revenues that are scalable across all platforms actually. We can also see some revenues that are purely from the online and our mobile devices. How that will balance in the future is a bit difficult to be exact on, but so far it looks good actually. Another comment on the Facebook social media, we are for the time being, developing services that is what should I call it? Cross products between social media, mobile and web. We have this kind of projects going on, especially in Asia. Looks very promising.
Yeah. Your hand there first and then you.
Thank you. Christer Roth from DNB. Just a quick question. You talked about the successful sites and how you develop those properties. Could you also tell us a bit about how you choose which sites to close, such as Sakhrom in the Ukraine?
Yeah. Close. We actually as I said in my presentation, we are moving some sites from the launch phase, as I said, to the start-up phase and start investing. Now and then we see that the market is not responding according to what we are used to be honest. Then we typically move it back to the launch phase and do what should I say, other experiments with it. The site you mentioned was never actually moved from the launch phase to the start-up phase, so we didn't invest money in that that site.
We have done we have actually moved a few sites into the start-up phase and so to speak, redecided and moved it back to to this more experimental phase, the pre-launch, launch phase. I mentioned Greece as one example. Australia is another one.
Yeah. Just a second question. In terms of regions, where in terms of your sort of overall ambition of becoming the number one online global player in terms of classifieds, which regions do you believe you'll see most success and potential in? Is it LATAM or?
We still see a lot of potential in Europe actually, and that is our, main area. Asia is very exciting. Yes, absolutely, Latin America.
Okay.
Hi, it's Mark Sieber from JP Morgan. Just one question on Leboncoin, actually. Could you tell us a little bit more about the early years? I mean, it seems that basically eBay was just sitting there, like a chicken waiting for Christmas and doing nothing. That seems to me a bit too easy, also in the future in other markets. Could you just tell us a little bit more, why they seem to have underestimated you and what really happened in those early years?
Actually, they haven't done nothing. They have helped us by doing two things. First, they had, at that time, a very dominant position. They thought they could be very aggressive on pricing. They have started increase their price at a significant level, creating some dissatisfaction among their users that have started to test free classifieds websites. That was the first help they have given us. The second one is that when they have realized that Leboncoin was growing fast, they have launched a free classifieds website with a map on the front page, a copycat of Leboncoin. The eBay community is a very strong community. They were considering that Leboncoin was not for them until eBay copied Leboncoin.
They said, "Okay, if eBay in which we believe in is copying the one we are not believing in, let's test the original one." This move, that is a smart move from eBay to say, "Okay, there is this little site coming up quickly and developing fast. Let's copy the concept, and let's win the market." Actually, it helps us a lot because on this specific field, we were doing the job better than what they were doing.
Yeah, I can also.
Going forward in other markets, I mean, clearly have you on the agenda now, and what shall we think about the other markets? I mean, clearly they probably won't do this mistake again and have a lot of cash in the pipeline as well. Why should we still think that this is not really an issue?
I had a comment to the first question actually, I think we have to be aware of eBay's main model so to speak, because eBay is an auction site, and very much about new consumer goods, not used consumer goods, private to private. They are also in an other kind of business that is much more e-commerce actually than classifieds. Even if leboncoin is now much stronger in traffic in France, it's not like eBay doesn't have any kind of presence or revenue in France. That is partly answer to the second question as well. These two models are a bit complementary actually.
The first row there and then the second and then the fourth.
Yeah. Thanks, everyone. Just following on to the questions to you, Olivier. Could you, firstly just, explain the revenue model? You say it's free to place an ad. Can you explain the revenue model for the website, leboncoin? Also, I know that Blocket has been going considerably longer. They're generating EUR 10 of revenue per internet user. You're currently on EUR 1.3 with very good margins. Do you think 10 is a realistic aspiration without risking over-monetizing? Yeah.
On the revenue side, as I mentioned it in one of the latest slide, we have diversifying source of revenues. Being one of the top player in the internet world, of course, advertising is an important part of the revenues for us. The other part that I mentioned was to say, okay, we do propose services for individuals, and this is for free, but there are some premium options you can buy to make your ad more efficient. This is also an important revenue driver for us. The last part is on the services we can propose specifically to professionals.
Car dealers, for example, they want to have an easy life posting ads on the site, and what we can propose them is automatic import solution that goes through subscription models. Those are the three main areas of revenues. Concerning the revenue per capita, the guy is setting the target. Hope he hasn't seen the slide he has written.
As I said, I hope we are able to move leboncoin closer to Blocket, and I'm quite sure we are able to do that. What do you think are the drivers to get there? I will not. There are a lot of drivers. I don't think we can explain all of them today. I think that is better to do in the break or something. Yeah.
Okay, handing it over to the back.
Yeah. Thank you. Mark Stanchill, Danske Bank. Three questions, if I may. First one is basically, if you please could put some more color on how you are planning mobile innovations on the other established online classifieds. It's very exciting to see how FINN.no and leboncoin is doing and planning to ramp up. Please, for ample, Luda, Willhaben and some of the others, if it does maybe. We will see iPhone, iPad apps there maybe in the future. Second question is basically, can you please say a little more about how you're tackling competition, especially in, let's say, large potential markets like Brazil? How are you tackling Mercado Libre, for example? We're seeing that player with a very high number of page views and unique users.
Thirdly, overall, could you say something more about how you are planning to expand into new verticals? You know, we're seeing a lot of websites with, you know, general merchandise car real estate. FINN.no with, you know, large number of verticals. Could you please put some colors on that? Thank you.
I can perhaps start with the last one. I said that we have different strategies for all the different sites in the different phases, and the strategies for the different phases are different. Of course, some of the strategies for the mature companies is to look more into verticals. No doubt about that. To the first question, we are launching mobile solutions in absolutely all sites, no doubt about that. But I would say that the most mature sites are in the forefront of that development now. Exactly Blocket, FINN.no and leboncoin is actually the sites that has done, is in the front of this development.
The other front is actually the sites we have in very immature markets like Indonesia, and, yeah, I will not go into all the countries, but in Asia, actually. We have a heavy mobile development in very mature markets, and the reason behind was something I explained earlier. We have a lot of mobile development in the very mature markets. In the mid between, well, we are working at it, but it's not top priority right now. You had a third question. I have forgotten that one.
Yeah.
Yeah. That's fine. Sorry. It was Brazil and, how we are handling competition.
Yes. Correct.
Yeah. The whole experience during all these years has actually taught us how to handle competition. It's a little bit back again to the philosophy and the strategies we apply in the different stages of development. To go very more in depth of that would perhaps be difficult to do here, but that is the answer. We have experience on how a site should react in the launch phase, in the startup phase, in the traction phase, and that is actually how we work with the competition all the time. If the question was more how are we doing in Brazil, well, we are doing good.
Okay. We have time for one last question then.
Thanks. It's Jonathan Helliwell at Bloomberg. Just two questions, actually. First is you mentioned Eniro got no traction in the tradesman sector. I wonder if you could just talk a little bit about why that was. Is it because they perhaps around their pricing and them trying to protect, i ncome under revenues effectively in listings. Second thing is in the French real estate sector, we'd all been brought up to believe SeLoger was the market leader. Can you talk about how you segment the market? How you see yourself as a lead? How you define yourself as a leader there?
Could you repeat the first question?
Can you talk about Eniro in the trading sector, saying you haven't got any traction.
Oh, Eniro. Yes.
Yeah.
Well, the interesting thing, in the intro, we talked about learning from unsuccessful projects, and we had Sesam, the search engine. What we learned during Sesam was that Yellow Page players like Eniro are vulnerable to disruptive business models, such as the one we have introduced with FINN oppdrag. We see that they can't go into that business model fully without cannibalizing some of their existing revenues. They have a very w ell, this is my opinion. They have a very ambiguous problem to deal with when they are going into this market. I think they're, they have a hard time focusing fully on it. SeLoger, Olivier?
Yeah. Concerning SeLoger. SeLoger is definitely the key player on the real estate markets. They have been there for more than 10 or 12 years. Have built very strong positions. In terms of revenues, they are monetizing very, very well, and they have very strong position on the main French market, which is Paris. Shall we have a look to figures of leboncoin. Today, the real estate vertical on leboncoin has a reach of 5 million users a month, when SeLoger has a reach of 3.5 million a month. Meaning that in terms of traffic and use, leboncoin is the number one player. Why so? Because what we have built is very strong positions outside Paris, which represent, nevertheless the majority of the French population. We have definitely a very strong potential that should be developed.
Okay. I think there are two more questions out there. We will have time for them as well. Am I right? Yeah.
Thank you. I'm Thomas Simpson, Pareto, [inaudible]. Should we expect to see any in-market consolidation in the markets you are exposed to, and should we expect Schibsted to be part of any, if any? Thank you.
Okay. Could you please repeat the question?
Sorry. Do you expect any in-market consolidation in the markets you're exposed to given the large economies of scale?
Yes, we see that in several markets. Then again, we have some markets where the opposite happens. It's not easy to give a very exact answer on that question, I think.
Okay. We have one over there.
Hi. Ole Bentsen, Hafslund. Do you think there's a potential or you think it's probable that you will be able to introduce payment for ads in countries outside of Norway and Sweden, like in leboncoin, Norway? If I remember correctly, you went the other way in Spain a few years ago and took away some of the payments on ads there. Which of course would be a key driver of monetization. And is the comparison to the monetization levels in Norway and Sweden really a good comparison given that they are payment models compared to the other markets which are just ad-based models?
It's a fair point, but to be honest, I think you overestimate how important it is to take paid per ads. We don't consider to take paid per ads in leboncoin from private persons. From businesses, we do that already. We have quite a few other revenue sources, and I think you would be surprised if you know, how much these other revenue sources is in FINN.no. We have much more revenues from other kind of revenue sources than these pay per ad kind of revenues.
For example, in Blocket, could you give some indication of how important the user payment is? What would that be?
To be honest, I don't have that figure right now. Yeah, we could discuss that later, I guess.
Okay. The last one there.
Dag Stadheim from ABG Sundal Collier. Two questions. You guide for revenue growth of 50%-20% within your business. Could you also share some thoughts with us on the margin level? We see that the two established stores that you have a quite different margin level, which is an interesting observation. Secondly, when you plan to be the number one within this space in three to five years, how do you define number one? Is it simply a question of having larger revenue in the category than eBay, or are there some other metrics also?
I can answer the last one, and I think Trond should perhaps answer the first one. The last one, yes, it is in value creation, so revenue and profit.
When it comes to the margins, we see, as you said, 15% to 20% top-line growth on the established classified operations. We see high stable margins on those operations going forward. We, due to the fact that we will continue to invest in product development, continue to invest in new verticals like real estate, et cetera, and also that we will have some valuation from new sites like Subito and [inaudible] coming up to the established, we have decided to focus on what is the really key drivers and not giving a precise guidance on operating margin going forward.
Do you wanna add something, Mattias? No, that's fine. No? Okay.
Just one final detail. Could you just share some thoughts with us why the margin is so much higher in leboncoin, versus FINN.no, which is maybe a little bit counterintuitive?
I can elaborate a little bit on that. First of all, leboncoin has high margins which has really been built up in the successful revenue model. Cars is of course an important revenue source, Auto leboncoin, a high volume. If you take other verticals like in FINN.no, FINN.no has also very high margins on sub verticals like job and real estate, if you, if you really split out that. We have a lot of other also verticals in FINN.no, like in travel with lower margins, but still profitable to be, the same with the service segment. It's in broader verticals, broader sites, you normally see a lower operating margins.
Also the same in Blocket, because we're now building out the real estate in Sweden, and also the job market in Sweden, which looks, however, promising. Therefore, there is quite distinct operating margins between the different sites.
Okay. I'll suggest that we have half an hour break. There will be refreshments out there, and we will see you back here at three o'clock. Okay, should we continue? [crosstalk] Let's move on to the part that I must admit is closer to my heart than than classified. Now we're going to talk some more on the Media House part of Schibsted. It is fair to say, I think, that the fact that some newspapers were sleeping while others were adjusting to the market has created a stereotype picture of the newspaper business as such. In my opinion, which of course is a bit biased, I would say that the Scandinavian papers have been quite well at adjusting to their audience and their development. Our CEO of our newly established company, Schibsted Norge, Didrik Munch, will tell you more on the development on the Media House. Please.
Thank you, Kjersti, good afternoon, everyone. I can assure that the Media Houses are closer to my heart as well than the classified part of the business. That's probably the way it's gonna be for quite some years. What I will talk about in the next 20 minutes or so is how we are going to maintain the profitability and the strong cash flow from our Media Houses in Norway and Sweden, how we are gonna manage the transformation into the digital world. This is also what my management group talk about every day, what we try to focus on and what we try to execute on every day. I will divide my presentation into three parts.
First, I will say a few words about the current position we have in Scandinavia, then the actions we have done and do, and the plans for the years to come will finish off the presentation. We are market leaders in Scandinavia, as Rolv Erik mentioned in his speech. We have a tremendous position both offline and online. If you look at our offline position in Norway and Sweden, we have more than 500,000 subscribers, and more than 500,000 people buy our single newspaper, our single copy newspapers every day, which make a total circulation of about 1 million daily offline. That means that more than four million people are reading our newspapers every day in Norway and Sweden. Online, we also have superb positions.
We have more than 12 million unique visitors in Sweden and more than 8 million unique visitors in Norway. As mentioned earlier, we have the clear number one site both in Norway and in Sweden. In Norway, of course, VG, and in Sweden, Aftonbladet. There is one thing which I think is quite important to focus on when we look at our online position, and that is that more than 90%, or close to 90% of our users are direct users. That means that they go direct to our sites, and we are not dependent on search engines, Facebook, or other sources to get the traffic into our sites. That shows how strong brands we have in the online world in Norway and Sweden.
If you look at our position out in the regions, I'm not allowed to use words as monopoly or dominant, but it is fair to say that we are clearly in a fortunate position in the regions with clear number one positions, both offline and online. I think it's important, I know that many of you know what I'm gonna talk about for a few minutes now, but I think it's important for those of you who don't live in Norway and Sweden understand what kind of position the Norwegian and Swedish newspaper have in their markets. For me, it is important to say that we are not in an Anglo-American decline. We keep up better for many reasons. That is because papers in our region are more social institutions. They are cultural symbols and agenda-setting in another way.
In some of the smaller regions, it's still like they are, in a way, the glue in the community. As many has said before me, that is not because we are in a bad position when it comes to digital development. We have the global leading position in mobile, in smartphone penetration, and broadband usage. We in a way have both in Scandinavia, very strong newspaper reading and very strong online positions. Of course, our newspapers are also affected by the digital transformation. Circulation falls, and especially for the tabloids. It's important to be aware of that the readership is still quite high. For the subscription newspapers, it's not far from the levels we saw some years back, and not very far from peak levels, to be quite honest.
We also see that the advertising revenues hold up pretty well. We see that the structural shift affect us, and there's a very tough competition from the online advertising business and from the TV. I am quite sure that the printed newspaper in Sweden and Norway will, for many years, be major media projects in the years to come. I will move to the actions we have taken. This picture shows you the conceptual model we have been working with to reshape the media houses during the past few years. As you see on the left-hand side, yes, three years ago, that was prior to the Media Norge merger, the media houses were loose coordinated, and every media house did more or less everything on their own and in their own silos. Since then, we have done quite a lot.
We have restructured, and we have cleaned up the structure, and we have centralized all the support functions and also merged the printing plants into one entity. This is an ongoing process, and there is still room to improve it going forward. I revert to that. That is why project and change are the top of my agenda every day and a priority to the management groups in Sweden and Norway. I won't go in detail on this picture, but it gives you an overview of some of the main projects we have completed. Change projects involve all aspects of our business, from core sales and journalists to supporting staff and printing plants. Most importantly, you see on the right, we have still many initiatives that we work with now, I believe that we have a lot of potential going forward.
One example, which can illustrate this potential is the establishing of Schibsted Norge, which may further help us to set free the potential in the cooperation between the subscription newspapers in Norway and VG. This upside has been largely untouched this far. It will create improvements in our digital development, our market activities, and it will further improve the efficiency of the back office platforms. I also would like to show you what approach we have to content sharing in the subscription newspapers in Norway. We cooperate in what we believe is quite a smart way of doing it. We pool resources to improve cost, and we use the best content to strengthen the quality, and we make sure that we keep the local feeling, which is so important in the local markets. Most of what we do are purely local.
It's local production for local consumption. Quite regularly, one of our newspaper hits an idea or especially a good concept, which is then available for all newspapers, and also online, of course. This means that we spread good quality to a lower cost. Other times, one newspaper gets hold of an especially good source, and we may pool resources to support that story. That what happened when Aftenposten got the WikiLeaks cables. Finally, sometimes events are so big that it engage all the newspaper and all the readers. It really pays off to be a member of a big media group because that gives more resources on the biggest story. If you see down on the right-hand side what we did when we had this terrible attack at Utøya, for example, in the summer.
To sum up our action plans. We came from a situation a few years back where all our media houses, I must say, were rather relaxed on efficiency and didn't cooperate in a good way. We have now changed that. We work on projects that change the media houses, making them lighter and leaner. This is, as I said, top of the agenda. We have plans for the future that will keep up the pace of change. Based on this, I can assure that first, we will be able to keep up the improvement in online re-results. Here, I illustrate this with an image of the online bottom line of the regional subscription newspapers. You must keep in mind that, for example, Aftenposten n ow have higher advertising revenues online than they have offline.
Both, VG and Aftenposten increased their online results in the fourth quarter. Second in print, we will have projects to maintain the profitability. Even if wage growth and inflation water down our improvements and circulation decline means a weaker structural position for our printed products. We believe we have many good initiatives to counter this and to keep the cash flowing from this part of our business as well. As I said, printed news is still a good product in Scandinavia. In short, we will grow online and keep print profitability at the same time. Now I shall move on to what we see in the years to come. In the print part of the business, it is of course a continuation of what we've been doing this far.
The main headlines are cost adaptions, of which you have seen we have many plans for, and price hikes. Of course, we have to develop the paper to fit the paper in to a new media environment. In the digital part of the business, it is about transformative growth. We transfer the positions we held in print and on the browser onto mobile. We are actually seeing, as told before from Rolv Erik, that we are being dealt an even stronger hand on our mobile platforms than we had on the browser. We do improve our position relative to our competitors. We focus on pulling more value from every unique visitor, and we seem to be succeeding quite well. We little by little are adding new revenue streams online to supplement our advertising figures.
That is that we see we are doing better and better on user payment. I will revert to that in a few seconds. As you see, we have cut cost and personnel continuously. I think it's right to say that for the first time in over 150 years history, we have cut the numbers of full-time employees in a positive economic cycle, and we have improved efficiency greatly during the last few years. We are going to keep it up. The program we had introduced just before Christmas in Norway and Sweden will cut the cost base by NOK 240 million in the next three years. We do plan to stay ahead.
If more happens, if the structural changes is going faster, or we move into a more challenging economic environment, we will respond forcefully and quickly. We see that we have an upside when it comes to pricing, and I believe that we can increase our prices without losing out to our competitors. Low price sensitivity allows us to offset circulation decline and fund circulation revenues. This is an example from VG. If we increase the cover price by NOK 1 , that's 8% increase. If it's NOK 2, it's not 16%, but it's a 15.4% price increase. You see the price upside to the closest competitor in Norway for VG, which is Dagbladet, is 25%. The price upside, if you look to how the two newspapers are priced in the weekend, it's 54 It is the same for the script-subscription papers, though not to such a great extent.
We increase subscription prices by 4% to 5% year-on-year. Our research shows that the price sensitivity is not triggered by a 5% price increase. To speed up the digital development, we are setting up development team in lower cost countries. That gives us two thing. We get twice the effect for sort of half the price. It also gives us the opportunity to attract good engineers and top developers. That is not always that easy in Norway and Sweden, which is quite small job markets. An offshore unit allows us to bypass this recruitment constraint. It also gives us more flexibility to grow and be attract with activity.
We are currently setting up a development unit in Kraków, in Poland. By the end of next quarter, we will be up and running with among 20 developers in Kraków. 2012 is the mobile year, not only for the classified part of our business, but it's also the mobile year for all our media houses. The growth in mobile isn't like anything we have seen before. The user growth is at an annual growth, both for VG and the subscription newspapers in Norway at about 200%. Afteposten, of course, is in the same trend. If VG Mobile was a newspaper, it would have been the largest, third largest newspaper in Norway, only surpassed by Aftenposten and VG itself.
As you see on the right-hand side of the graph, in contrast to a slow advertising market growth, when we introduced the browser, we see that mobile revenues are following at the same pace as the user growth. This is monthly revenues on the mobile from VG. Of course, the key to mobile advertising growth is that it's delivering effect to the advertiser. This is also an example from VG. On the screen you see an illustration of a campaign VG did for Rimi, and that's one of the top grocery chains in Norway, similar to Tesco in the UK. On the left-hand side, on a Monday morning, Rimi's grocery shop app was the 66th most visited app in the Norwegian App Store.
After advertising in 24 hours at the VG Mobile, it was the number one app in the Norwegian App Store. If you do it in the right way and the right product, it really works. When it comes to user payment, as Rolv Erik mentioned, Aftenbladet among our media houses has come furthest. At the moment, more than 135,000 subscribers are using Aftenbladet Pluss. It has a healthy growth, and the monetization is improving. In the regional newspapers, the smallest one, Fædrelands, at the southern part of Norway, now is experimenting on behalf of the bigger titles. That is to reduce risk and to improve the time to market. We will within short time, launch a subscription to brand for Fædrelandsvennen and we will do it in the second quarter.
That is a mandatory online subscription for all offline subscribers. We are using roughly the same model as we see Helsingin Sanomat, is using in Finland. Maybe we do it a bit more aggressive. As long as I have seen, they have succeeded in Finland, and I'm also quite optimistic that we will succeed in the southern part of Norway. Now I will, end this presentation, by illustrating our commitment with my own personal experience. For the first 10 years of my career, I worked as a police officer and a police lawyer. It was very much about discipline and living by some clear principles. It's the same thing with us. We are focused on discipline on the cost side. For the next 10 years, I worked as a banker.
It was about identifying and keeping value, it taught me that the value of having cash, that's the real thing. Let me assure you that we are committing to keeping the cash flowing also from our business. For the 10 years leading up to my current position, I was the CEO of one of our media houses. From that experience, I know that we derive our long-term value from our readership. We see that the readership is moving online and to mobiles, and we are focused on moving with it. I'm sure that we will keep the position in the new channels.
Therefore, to finalize, I'm quite confident that the media houses will be an important and relevant part of Schibsted's Investor Days for years and years to come, in new ways and with new products, but with the same solid contribution to Schibsted's overall value. Thank you for listening.
Thank you. We also have some time for questions. Now our media house. Yeah. Let's start here on the front.
Doug Sasmo from ABG. You said if the structural challenge has become bigger than expected, you are ready to react quickly and forcefully. Could you share some thoughts with us what that would mean in practice? Secondly, how confident are you that the big drop we see in circulation for tabloid newspapers is not an early warning signal for the circulation for the subscriptionbased newspapers?
Of course, if we have a structured change which is going faster than we see today, then we have to do more on the cost side, and we have to collaborate even more. I think we have lots of things we can do to offset such a development. To your last question, it's difficult for me to say that it won't happen. It seems like it is in another position when we come to the subscription newspapers, though we of course see that we have a decline in the circulation figures, but there's nothing, no, which should say that it's gonna be at the same drop as we see in the tabloids.
Okay.
Thank you. Martin Stenshall, Danske Markets. Just a question on Schibsted Norge first. I think you mentioned something like there could be a synergy potential, you know, of the regional newspapers and VG, you know, further potential. Could you please put some more color on that? Also the slide that that shows what you have done, still doing and will do in the future. Would you be able to kind of quantify what that could mean to growth and margins? Thank you.
I'm afraid I can't answer the last question in a way you would like. To the first question, yes, we see a lot of potential if what we have done in establishing Schibsted Norge. It's especially on the online. Not maybe in the products which you see as a user, but of course on the technical side and also on new developments. For example, there's no reason for why should we have two sources of recipes to our food sites. Why should we have the two different weather sites? We can do a lot of things, I believe, within the web TV, where VG is quite strong at the moment.
We have one here, I think. No? We're moving over there. That one there.
Hi. Owen Lisetta from Schwanz. First question. Could you elaborate, what you said your plans for the new subscription scheme for Fædrelandsvennen? Was it that every print subscriber will get a mandatory online subscription added to their bill, and so it's a way of increasing the subscription price, but you get the online version? Is that the correct way to understand it? We put it the other way around, yes, it is correct. All the subscribers, they get what we have online. Of course, they have to pay a bit more than they do pay today for the subscription. Well, would that include every sort of digital edition?
Everything.
iPad.
iPad, mobile, whatever device it's gonna be on.
Okay. My second question on price elasticity, especially for the single copy tabloids. Circulation is falling in excess of 10% year-over-year already. How certain are you about the price elasticity? If you increase the price, you're not gonna make it worse?
We don't really believe that there is an upside potential in increasing the prices. If you see what Dagbladet has done, I think there's quite something we can do in VG especially.
Okay, Atle.
Atle Vereide . There's a behind Trilla. Is there any cannibalization, do you think, from, mobile growth in VG on the online revenues in VG?
A little bit risk, but not that much we see today.
The delta here is clearly positive in total?
Yes, that's definitely.
Okay. Yeah.
Simon Wallace at ING. First question, you've shown some data for circulation decline, and you spoke qualitatively about readership. Could you give some data or some flavor as to readership trends? Secondly, could you explain the historical perspective to the Scandinavian advertising market that explains why print historically has been a relatively high share compared with other display media? Thirdly, can you talk about demographics, in particular age demographics, of how readership might vary amongst younger and older people?
To the last question, of course, there is fewer younger people who is subscribers to our newspapers. Of course, we get an older and older mass of subscribers in the subscription newspapers. When it comes to the advertising side, I think it's difficult for me to answer that question why, why it is. It is obviously because the advertisers know that the reach of the newspaper is so big, and if you put an ad in the newspaper, it works. I mean, it moves some people to the shops. The first question was?
Readership versus circulation.
Yeah. Of course, in the long term, the readership will following the circulation, but we see now that the readership is quite high. When we saw the latest figures, it keeps us quite well. In some of our titles, it even increased a little bit.
Okay. Over there.
Torus with Nordea Markets. I have two questions, please. First a question regarding pricing. You showed in your presentation that you see a 25% upside potential if you increase the price for VG up to Dagbladet. Could you explain why you're selling at lower price than Dagbladet if you say the sensitivity is not that high?
Will you answer that, Torbjörn?
Oh, yeah.
Here, here we got the chairman of VG at the moment.
I'm the chairman of VG, I guess I have to be responsible for that. I think actually what you've been seeing is that VG has had a steady pace and increased rather conservatively, but still doing it at a level that makes sense from an economic point of view. Dagbladet, on the other hand, has been very, very aggressive, and I think they're taking big risks. The thing is that hasn't yet undermined their position. That gives us comfort to the point that the price sensitivity is probably quite low.
Okay.
just
Yeah.
A quick follow-up on the question on regarding Fædrelandsvennen. Meaning that you're adding a mandatory subscription, that means you're gonna close the online site for non-subscribers, I guess.
That's right. Close or close, there will be a pay, kind of a paywall or maybe a pay nut. If it is a content which Fædrelands is having on their own, you have to pay. If it is more general news, you get it for free. We get into the front page, and then you have to pay if you are going further into specific editorial content, which Fædrelands alone to have. If it is more general use like, yes, a car accident in Oslo or things like that, you get it for free.
Okay.
Yeah. Could you talk a bit more about the free websites for VG and Aftenposten in the mobile world? I mean, what I mean by that is obviously you can access those sites also from tablets very easily, and the question remains: Why should, yeah, consumers pay for the app rather than surfing on the free website on the tablet?
I think, I think for Fædrelandsvennen and those newspaper subscription-based papers, they're going to the same content is going to be closed, whatever device you access it from. Even though you're... I mean, a certain number of articles will be restricted, and that will be also on the tablet on the app. We think, you know, we, we, I think I agree with your thought. It has to be, irrespective of the devices, we have to treat the customers the same. Does that answer to your question?
Sure. Yes. I mean, it's particularly on VG and Aftenposten, and I just try to find out, and I agree that the time that users spend on those sites is not that long. If you just think about, I don't know, 10 or even 15 minutes a day that you consume the content, you've seen the impressive traffic figures for the online sites, number one in those markets. I can't really see what the next step is, why consumers actually pay for it. What is the additional value in the app given that time is probably not as time spent on the site is probably not as much or as high as on print?
No. What VG has done is they have created a separate product called VG Plus, especially for iPads, and that is different both in content and layout from the normal VG.no. In many ways, it's similar to Aftonbladet Plus. It's a different kind of content, different kind of layout
Okay. We have one last question. Do you think to reduce the content on the free websites further, or are you quite happy where you are right now?
I don't think that's the way to go in the, in the long run.
Yeah.
Just a quick question. I mean, for those of us who don't know the sort of Norwegian landscape in terms of online news. I mean, one of the things that seems to impact UK newspapers in particular is the fact that you have the BBC, which produces very high quality news, that's available for free, and therefore, there's an incentive for people to use that rather than to go to the newspapers and so on. Can you just give us an outline of, sort of if there's any similar sort of products in the Norwegian market where there's a big state-owned, you know, whether it's the broadcast or the big media institution that has such a prolific website, or indeed, sort of are those services quite weak in Norway?
That is a question in Norway as well because we have NRK, which is the national broadcast, and they give the online news for free. That is a question, especially when we talk about Aftenpost and how we're going to deal with that competition. That's something we have to watch closely before we do anything with Aftenpost.
That is an issue in Norway, not so much in Sweden. In Norway, it's an issue. For instance, when Ferden is going to charge, the only kind of real alternative provider of news in that region would be the state-owned broadcaster, NRK.
I mean, if you were to compare with the UK market with the BBC, I mean, how would you judge them, relatively speaking, in terms of state broadcast? Does it provide as much information, relatively speaking or?
Yes, I would say so. Yes.
Yeah.
Shall we then close the Q and A session? Yeah? No. Okay. Just one final.
Just a quick follow-up on the new subscription scheme. I believe the add-on price for the online edition of Aftenposten is about NOK 99 a month, if I'm not mistaken?
Full.
Are you planning to implement that full kind of increase on the subscriptions of every print user?
When we look at Ferden, we plan to increase the price, or the subscription price by 5%.
Okay.
Okay. Thanks. Thank you. All good stories has the number of three in them. That is also what feature journalism has copied, I would say. Anyway, we've been going through classified and the media houses, and now we're going to the third part of this good story, hopefully, you also think. That is the more risky part, as our Chairman of the Board mentioned in the beginning, namely the new initiatives. It is comforting to know that it's Sverre Munck who deals with that. He's Executive Vice President for Strategy and International. Please.
Thank you, Kjersti. It's actually a bit of a challenge to tell the third part of this story, given the introduction that was made by Rolf Erik. If you recall in the beginning, there are two cornerstones in Schibsted's circles in Norway, and there's an intersection, which is the third part, which is the one I'm going to talk about. It's a small part, so it's somewhat of a challenge. However, I'm actually hopeful that after my presentation here, that I will have been able to fill it with some content that will actually excite you somewhat and that we will, we'll revert to going forward. No, we're not going to lay a new cornerstone as a third story.
There's another concept, there's another expression that I would like you to keep in the back of your minds throughout my presentation. That is the concept of the ecosystem. Actually, what I'd like to do today is to introduce to you the notion of the Schibsted ecosystem. There are two components of this ecosystem that I will be showing you today, one in some detail. The other one will be more of a sneak preview. The two components are two operations that we are that we have set up, two operating companies. One is, in English translation, Schibsted Growth Media, in Swedish, Tillväxt Media, in Norwegian, Schibsted Vekst. The other one to the company called Schibsted Payment. I will explain to you shortly what they are doing and what they hope to do as well.
What is the basic idea behind Schibsted Growth Media? The basic idea is to leverage our incredibly strong digital assets primarily, and with that leverage, to actually catapult new services into growth and value creation. We have had this tradition both in the news part of our business and in the classified parts of our business in the past, going from offline to online. What we're doing here is taking a somewhat broader next step, where we are investing in developing services that are not strictly classified, yet somehow or another have a notion of a marketplace or other traditional content that has been provided, information that has been provided by newspapers. We are very strong in Norway, Sweden, as has been demonstrated before, and our companies, our operations serve as magnets for startup companies.
We have an incredible amount of incoming deals, people who want to cooperate with us because they know that we can help them grow. Once we have invested in them, we do the best we can, and I'll give you some examples of that, to make them grow, to create value. Some of them, we might actually, after having improved success in Norway and Sweden, we might take out to other countries. Those are the three steps: attract, develop, and hopefully export. Just for reference, approximately seven out of 10 Swedes visit our online sites every week, approximately nine out of 10 Swedes every month. The figure is more or less the same for Norway. That is a very, very, very powerful reach. That means that we have a lot of traffic. Here we've illustrated a traffic hub.
This is a still photo. It's not that there's a queue, it's moving fast, there's a lot of traffic, as you can see. Our notion of a growth media is that we try to maximize the value of this traffic. The idea is the following. There are some sites, like general news sites, even the classified sites, who have lots of traffic, their average revenue per user, ARPU, I'll be using that expression a lot today, is quite low. It's primarily through advertising. There are some other sites that have a totally different business model. They're also business-to-consumer business models, they are more cost per action or lead generation models, illustrated here on the left-hand side with Lendo, which is our lending portal marketplace in Sweden.
We have these sites with lots of traffic and low ARPU, and we have these sites with a lot of high ARPU or value per customer, but with little traffic. The idea, of course, is to make the traffic flow in the right direction. This one you've seen before. It's what we call an incentivized model to turn traffic into value. The word incentivized relates to the following. There's some real money coming in from Schibsted into a traffic fund. Then there's some funny money, if you wish, where actually all of the companies that participate in this fund allocate part of their revenues into the fund. The sum of this, of course, is zero at the Schibsted level.
The fact is that we have some sites that have a lot of traffic generation potential, as I said, and some others that need it. We have made an internal pricing system, shadow pricing, if you wish, that has determined the value of one visit to a site like Lendo on a particular weekly day or a particular in other situation. For travel sites, the value would be great, let's say, just before summer vacation. For weather sites, it could be at a different time of the day of the year. For Servicefinder, it would be when people renovate their houses in the spring. Each of these companies that we have here have a different need for traffic at different times during the week, day, or the year. We have this system.
We have people working with this that manage the traffic, shadow pricing, and we actually incentivize these big traffic machines to send their traffic to the ones that need it when they need it. It works. We have some pretty good examples of companies that have succeeded in this fashion. Blocket was one. I'll show you some other ones as well. This is an investment company. We invest in startup companies. What are the criteria? It used to be green when I sent the presentation, but now it's red. Green means very important. First of all, the company has to have growth potential.
ability, the potential to become number one in the segment, and the segment itself must have growth potential, so there must be growth potential. Secondly, we need to have an entrepreneurial culture. Rolf Erik said earlier that we paid lots of money in 2003 for two-man operation. Those two people, I wouldn't say lived and died because they're happily alive, but they went to sleep thinking about their product, and I'm sure they dreamed about their product, and they woke up in the morning thinking about their product. That sort of passion for what they're doing is something that we need to keep even when they come into our big corporate culture.
We don't want people saying, "I've been bought by Schibsted, and now, you know, things are going to move by themselves." That's not what we want. Entrepreneurial culture, and we keep these companies as separate legal entities. We have to make sure that they can actually benefit in a good way from our value. That typically means since we have big consumer sites, that we're looking primarily for business-to-consumer business models. We don't preclude business-to-business, but business-to-consumer is more in our DNA. The product focus. Again, the passion for the product. The pixel must be in the right place. That's the sort of winning criterion in a very, very competitive digital market. The business model, cost per action is what we really like.
Could be also some other, let's say, lead generation model. Lock-in effects. We love lock-in effects. Network externalities is something we know everything about from the media business, and we look for those as well. They should be easy to integrate into our platforms. Also currently, our strategic focus is on private financial services. Could be other ones, but currently, our cluster is within that area. We don't intend to buy or start up any new, social media or social communities. We've done that once before, but we have nothing against buying into services that actually work with or leverage social media. Excuse me. When do we invest in these companies?
We don't invest in PowerPoint presentations, and we don't invest in companies that are already big and that attract the private equity players. We invest in a very early phase. We like to have proof of concept. The prototypes should be working if they are not already the real ones, so that we can very rapidly test the impact of putting them into our traffic flows. Some historic slides here. The first one was in 2002. By the way, at that time, we didn't have this company called Schibsted Growth. We have it now. We've kind of industrialized the way it works, but this was before we had established that company.
it was Blocket in 2003, and by the way, now if you're a car dealer and you want to put ads in Blocket, you have to go to Bil. Already there's a cooperation. A few years later, we acquired a small domain name actually called Hitta.se which means find. It was nothing, we developed it by putting it into our traffic machines with a very good and simple user proposition. Today, approximately 20 companies, I wouldn't say a widespread portfolio. Most of them are in personal financial area. There are some coupon companies, Let's Deal, an insurance marketplace, bank marketplace, electric power marketplace. We have a travel destination. We have weather, which is, of course, classic newspaper type of content.
Most of these, without exception, go well. There are exceptions and where there are exceptions, and they don't work, we sell them. We have already sold a few companies externally. By the way, the biggest sale was internal when Blocket was sold from this company to Schibsted Classified Media back in 2007 or 2008. In terms of impact on the numbers, these are the Swedish numbers. Already SEK 800 million, roughly, EUR 100 million with a pretty nice margin and growing. Okay, they are not the cornerstones that the media houses and the classifieds are yet, but growing at a nice pace and hopefully something that we can do in other countries as well. We established a company two years ago in Norway.
It came off to a somewhat of a slow start. Now, it's picking up speed. Since all of the Norwegian operations will be now under one umbrella, I'm quite sure that will also help in terms of speed. That was the first part of the Schibsted ecosystem. Here is another one. I think it's fair to say that traditional media has been pretty bad at managing their customers to create maximum value. Traditionally, we had one product, let's say in print, one price, one product. Now we have not so many prices and not so many products in print.
More prices and more products in online, still it's fair to say that managing customers for higher ARPU has not been really the core DNA of media companies. That is something we want to do. We want to do something with that. The Schibsted Payment initiative is our one way of doing it. By the way, Schibsted Payment without online classifieds and Schibsted Payment without media houses has no meaning. It has to be done with them in conjunction with them. Starting with the media houses. Currently, user payments are negligible, only about 5%, 6% of total digital revenues. However, there are some recent examples of willingness to pay.
Not all of them are, let's say, directly applicable or replicable for Schibsted. There are examples, let's say, The New York Times recently, Helsingin Sanomat in Finland, Aftonbladet in Sweden. There are examples that people are willing to pay for content. Another shift that has happened gradually, I would say, is that whereas, let's say five or 10 years ago, people were reluctant to log in to a site or log in to a new site. There was no value added to logging in. People were reluctant to give the information, and they were also reluctant to share information about themselves. That has really changed with the advent of social media.
The digital natives, which we will have been up here on our part, they really have a much lower threshold in terms of logging in, giving information, and sharing information. Based on these trends, we will be doing more experimenting in terms of charging or developing products that we will charge consumers for. Didrik just mentioned the example in Fædrelandsvennen. That is the bundled model, where we bundle digital access to the offline offering. The freemium model, where part of the offering is free and the rest is paid, is already something we have in Aftonbladet Plus.
By the way, the model down in Fædrelandsvennen will be bundled, but also freemium because part of the content will be free, and part of it will only be available to the print subscribers, unless you pay, of course, and become a digital subscriber. Pay-per-view has not worked anywhere, so we're not going to give that much attention. The uniqueness of content is not the only thing that people would be willing to pay for. If you're the Financial Times or The Wall Street Journal, your content is quite unique. If you're Fædrelandsvennen, it might even be unique in Kristiansand. If you're a more general news-newspaper, it's not necessarily uniqueness. There are other factors such as convenience and availability everywhere.
For classifieds, currently, as you've seen in detail today, we only charge paid listings in Norway and in Sweden, and we have lots of voluntary upselling features. Again, the digital payments industry is in an incredibly exciting moment right now. Last week, we saw a release from, I think it was Barclays Bank, with a mobile payment offering called Pingit. Every day, you see notices of investment companies putting money into startups that are developing different types of digital payment solutions. Escrow has been around for a long time, but peer-to-peer payments, mobile completion, et cetera, near-field communication, all of these new technologies have generated a real hotbed of innovation within this area.
From the consumer side and also from the sites themselves, there is and will be even greater focus on anti-fraud measures as these, the leboncoin and Blocket in they become ubiquitous, and you have to be sure that people are not defrauded. We think that there is a potential, even for our classified sites, to take out more revenue per user, not necessarily by forced listings, but by other services that we could provide to them. We could, let's say, enter into the transaction itself and take part of the payment service provider value chain, or we could provide ancillary services once you have done the transaction.
Once you know that Peter has bought a car from Paul, you know that Paul will be needing insurance, and we could start plugging those services into our portfolio as well, as Kristian mentioned earlier. It's important to know that the amount of information that you get when two people transact is just enormous. Another area that media has not been very good at is to tap into the potential that big data, let's say, with Amazon being the best in the world, provides. We have one person called a data miner in Schibsted, and I'm sure that in some years we will have 10, 20, or 50 data miners. We should, because there is so much value to the information that we can gather on our sites.
We have launched a company. It's called Schibsted Payment. We've even launched a service. It's called Schibsted Payment ID. If you have a bit of imagination, you see a, an I there. This is a D. The idea is for this to connote safety and security. This is the Schibsted Payment logo. The idea is that Schibsted Payment should work as simply as iTunes, with click here for payment. It has two components to it. It has a sign-on service where, for example, if you are going to make a comment on VG, you have to identify yourself. This particular tool is a way of ensuring that we know who this person is.
If you're going to pay for Aftonbladet Plus in Sweden, as 100,000 people do, you have to identify yourself, and we use SPiD as an identification system. The nice thing is that if you log into Aftonbladet Plus, and if you go to Blocket, and you're still logged in, we recognize you as an Aftonbladet Plus user. When you're going to place your ad on Blocket, we can say, "Do you want to pay with Schibsted Payment?" Then it's very easy. You just say, "I agree to share my information with Schibsted Payment," and then you pay.
Given the fact that we reach 80% to 90% of the population any given month, we hope to be able to build up a pool of, let's say, all Swedes and all Norwegians over time that are into our database. The second component is a payment platform. We're still early days, and we already have some functionalities like card on file, the ability to do recurring payments, and so on and so forth. We have ambitions here to also amplify the portfolio of services we provide as a payment provider. Here is Schibsted Payment in action. We migrated Aftonbladet Plus as a payment and a login and a payment platform a month ago. As you can see, our logo appears. Here's our logo. We have Visa, MasterCard, and PayEx over here.
This is already functioning. We have approximately 100,000 files, cards on file, and all the KPIs after the migration have been either at the same level or better. We're very, very happy with this first launch. Second, within the classified parts of the business, I think Kristian touched on it, but we have escrow payments that typically are used with remote sales. PayPal exists in Scandinavia, but it's not a big success. Our focus area initially will be in the pickup sales. If we somehow or another can provide a service where we substitute cash with a mobile completion setup, I think we can provide convenience and safety to our users. Again, even without charging for it, we will provide value, and somehow or another, that value will be coming back to us.
For 2012, we have migrated Aftonbladet, a success. In two weeks from now, we will be migrating VG as well, and I'm convinced enough that we can say it will be a success as well. We do have additional media house launches planned for this year, and also some classified initiatives. I don't want to be more specific because the elements of the launch are not finalized yet. I can tell you one thing, that this payment part of our business, which we think has been undercapitalized, is an area that has a lot of management attention currently. It is really an area which is very important for us, and we think it can provide substantial new value. Our ecosystem then, Schibsted Growth Media using the traffic machines.
Schibsted Payment, facilitating user payments for the media houses, facilitating payments between consumers for the classifieds, gathering information on everybody. We think that these are two mechanisms, two elements of our ecosystem that can be quite valuable in the future. Again, their value is totally correlated to us having both the media houses and the classified operations. Finally, this is an illustration of the Schibsted ecosystem. It's the first time we've used the word ecosystem in a external presentation. For those of you who are engineers, this one here represents the so-called perpetuum mobile gear system, the eternity machine. We all know that eternity machines don't exist. You need to add new energy into it for it to run, but as important, you need to reduce friction.
If you've seen the sort of restructuring activities that have been going on within Schibsted in the last years, Schibsted Sweden, lately, Schibsted Norway, it's also about reducing friction. I take part in a lot of group meetings where I have people from VG, Midtnorge, Aftonbladet, Svenska Dagbladet, in the same meeting rooms. That wouldn't have happened 10 years ago. We are reducing friction within the system so that this can run more smoothly.
In terms of what then is the external energy that will keep this going, well, I think it's fair to say that, the culture of innovation, the spirit of innovation that we have in Schibsted at the, let's say, group level, in terms of a group culture and also at the individual level, I'm pretty convinced that spirit of innovation will be the energy that will feed this machine and keep it humming. Thank you very much.
Thank you. Are there any questions for Sverre? We start over here as soon as the microphone's approaching.
Thanks. Martin Stensholm, Danske Markets. First, you know, it seems like this system of ecosystem is working out great in Sweden, and I've seen some launches in Norway also so far. What are you thinking about exploring this ecosystem to other places? I mean, you've got a lot of traffic, let's say, for example, let's say, in France with leboncoin and other places. Would it be certain criteria that you're looking for in order to, you know, let's say, try to export this ecosystem other places also?
Yes. It has a lot to do with reach and also, with, let's say, a combination of assets. There are two countries that would fit this, not to the same extent as Norway and Sweden, but still, and that's Spain and France. Those two countries are countries that we are, let's call it, studying. No specific plans to launch there. We can try it out as we did in Sweden. We didn't have the setup 10 years ago, but it still worked. Now that we know how the operations, you know, success factors for the operations, we might try to emulate it without necessarily setting up a big structure in the beginning. In Norway, yes, it's part of the strategy.
In those two countries, let's say, put it this way, we're looking actively into those two countries.
Yeah. Just one follow-up question. Would you be able to comment on, let's say, investment structure in setting up a new sites like this?
I can comment on one thing which is simple, and in terms of levels, I will not comment. When we buy into companies, we have a pretty clear setup model that we nearly always use. We invest in three steps: first, a minority, but with an option to a majority, and then a final option to 100%. We don't pay very much for the first part. Typically, we pay most for the last small part. That was the case many of our investments. That means that we don't take a lot of financial risk in the beginning, and we see once it works.
In terms of the valuations at the end, then they are more conventional because then they're already stable businesses and they're not fantastic, multiples, to put it that way, very often.
Maybe one last question. You know, personal finance and travel has been mentioned here. Could you comment on any other kind of verticals that you're looking into?
No.
it is considered your answer. Okay, I'll pass it over to Atle.
Thank you. Atle Dyregrov, E24 Næringsliv . You talked about the combination of media houses in Norway and Sweden, and let's say this ecosystem set up. When you talk about France and Spain, does that have any implications strategically for 20 Minutes? Does 20 Minutes paying, sort of, play any role in this thinking?
Look, these are early days, and we haven't made any decisions. Take France. It's a very easy country to describe. We have more than six billion page views per month for leboncoin, and we have maybe 5% of that for 20 Minutes. Maybe even less. On the other hand, just having one, let's call it flywheel, helps, and particularly is good, and it's particularly good if the services are very closely related to buying and selling. What experience in Sweden has shown that it actually is also helpful to have different types of sites because people visit them in different contexts and different situations.
Both in France and in Spain, we have 20 Minutes, and they are pretty big sites in terms of new sites, but they're small sites compared to the classified sites. In Spain, we have a larger portfolio of classified sites. There are some, let's call it structural impediments to doing this deal now simply because we have minority shareholders here and there. Some of them will be solved with time. That complicates things. It's much easier if you own the whole traffic flow. I don't think that would preclude doing it in countries where we don't own everything, but it's a bit more complicated.
The editorial part doesn't play an important role for France and Spain, I think.
Well, as a... Well, yes, in terms of as a traffic, source of traffic, yes. As a source of promotion, yes. Marketing, yes. If you look at the pure number of page views, it is a lot less balanced than we than it is in Norway and Sweden.
Okay. That was the final. Yeah. Thanks, Sverre. There has been a lot of talk on figures, but people have also been mentioned as important to the company. As you saw, Didrik show the picture how we had to sell papers when he was the CEO of a newspaper in Bergen some years ago, which was impressive. Schibsted has, from an investor point of view, also been connected to being a marathon revenue generator. To complete this picture, it's just about right that our CFO during the last 12 years, of course, is also a marathon runner. Also, Sverre has told us that we are an eternity machine. Which your presentation will not be in any case, but it will be the final presentation. Please welcome, Trond Berger.
Thank you, Kjersti. In Schibsted, we will focus on improved profitability and growth. In this presentation, I will explain how we are going to do it, that we have strong financial capabilities, and how we can measure it. We had financial targets that was 10% to 12% EBITA. That has now been discontinued. We have two distinguished operations in Schibsted. We have the online classifieds operation with high margin, profitable growth. We have the traditional media houses with stable, strong cash flow. Our aim here is to explain to you the underlying drivers and how this will develop. That's why we don't come up with a total overall target for the group as such.
If you look at the targets that we now have is that we have the top line growth that has been mentioned, 15% to 20% for the online classifieds. We see that we have a strong financial capabilities and that we will maintain an equity ratio 35% to 50%. It also means that our net interest-bearing debt will be in the range of 1x to 2x EBITDA, and we are currently certainly lower than that. If you look at the spending, the spending level for 2012 will be around NOK 500 million. That is what we see or project as of today. What will be the spending going forward?
It could be both, it could be in this area, but also it depends very much on the opportunities and the countries where we will continue to spend. In 2012, this of course, we have one big spending area is the LatAm and Brazil as an example. We have a strong cash flow, meaning that we also have the limited CapEx. We have maintenance CapEx in the area of around NOK 400 million to three times revenues, which is quite low. That's also typically the situation for these type of industries. That gives us possibility to have a stable good dividend payment increasing going forward. We have a disciplined expansion in our classifieds.
You see here the development over the last three years. We have a disciplined approach. We have do thorough screening. We have a lot of KPIs, and we do quarterly reviews. If they're not meeting the targets, we do adjustments. Also, as Sverre mentioned, we have scaled down two countries like Greece and Australia, where we didn't meet the requirements. This will continuously happen. We won't continue to spend if we don't see that it's on the path to get to be number one. You also will see here the growth and also inherit enhancement that we have demonstrated over the three years into the operating margins in the online classifieds.
This approach has paid off. If you look at the investment into the classified business, we have invested around NOK 900 million. As a result of these investments, we have created several number one positions. First of all, leboncoin in France, of course, with margin 65% to 70%, but also market leaders in countries like Italy, Austria, Malaysia. We also have, as we mentioned before, a good portfolio both in the start by traction phase, as a result of these investments. The typical path to a break-even for these classified is a 3 years to 5 year. I mean, in France, that was a star example, or three and a half years.
Italy, closer to 5 years. That's about the timeframe that we look into in these classified operations. The risk is, of course, something that we monitor closely, and we also define it into different risk categories and monitoring development. When it comes to further growth, we also have acquisition as the possibility. We have done some bolt-on acquisitions, rather small, although, but like DoneDeal in Ireland, like Tocmai in Romania, and some smaller car sites in Switzerland, et cetera. It means that we will look for bolt-on acquisitions. That's certainly something we will strive for, but there aren't too many candidates out there. That's also why we believe that the greenfield operation that is charged direct to PNL is a main route to follow.
We will focus in the media houses on the strong, stable cash flow. There we believe that there are further opportunities to take out cost, both on the efficiency to offset the underlying inflation, and at the same time, focus on the online growth, and especially the strong positions that we have in Scandinavia. This gives us the reason that we will maintain a strong, stable cash flow for the next years to come in the traditional media houses. We have a good track record when it comes to cutting costs. We did a cost cutting program that was finalized in 2010. Well, it was a NOK 1.7 billion program. We actually over-delivered on that promise. That is quite good.
We have a strong operational focus in Schibsted for time being. Also, we have this new program, around NOK 200 million, that will be gradually implemented throughout 2012. We don't, haven't come up with any new program, but certainly we have underlying efficiency programs that runs in our media houses. This is important to keep headcount down and focus on profitability. This shows the cost development from 2010 up to 2011. The cost is, first of all, in the online classified and the growth companies. It is actually kept stable and taking out even more cost in the other parts of the business. We have, as I said, limited capital expenditure.
We are already fully invested in printing facilities and buildings, et cetera. The investments going forward will first of all be in IT and IT systems. Typically, what we are investing in currently is the same editorial system so that we can streamline among the different media houses. It is a CRM system. These IT systems gives us the possibility to actually take out further cost across the group. Other than that, we don't have any plan for any significant investments in the next coming years. Therefore, we have a strong cash flow from our operations, and we had NOK 1.6 billion in cash flow in 2011.
We see that also it will be strong cash flow being generated over the next coming years. We have a balance sheet that is solid. If you see what we have done over the last three years, we have freed up a lot of cash. You see that the asset side is quite stable, meaning that we actually has expensed most of the investments we do in the classifieds through the P&L, not taking up in the balance sheet. At the same time, we have re-reduced the debt by NOK 2.5 billion.
We are now in a very strong position, we have a ratio of 0.8 net interest bearing debt over EBITDA. As you noticed, this is somewhat lower than we have the financial targets. We believe it's right to, or actually okay to be in a slight overcapitalized situation for some time. That we also have some possibilities as a result of that. We have cleaned up the balance sheet over the last two, three years, disposed of assets in the area of NOK 2 billion. We have limited assets that is not core operations to be sold out going forward. We have cleaned up and now have the two business legs that we have talked about.
The gearing, I said something about that, but it means that this gearing, we are comfortable with, and we will keep paying out dividend as I explained, according to the policy, and that we also will have a negative ratio, currently around 41%, and that we will be in the area of between 35% to 50%. We could also go up to a gearing up to 3x EBITDA, but then we need a specific program to break down the debt after that. We have a financial structure that is quite flexible. In 2011, we had CapEx around NOK 350 million. This financial structure is spread out over seven years.
We just recently had a bond issue with over five year and seven year bond. We were, I think it's quite attractive what we got on especially being able to get seven year money in the bond market. We would like to have different funding sources, not only depend on the banks. Therefore, we decided to have more money from the bond market. It's actually at quite favorable rates above LIBOR of around 200 basis points, 250 basis points for the five years and seven year loans. The dividend, due to the strong cash flow, it will be kept to be stable to growing dividend going forward. We also have a proxy to buy back shares around 10%.
Currently, we have bought back around 1%. We, for time being, don't have any plan, or we are a little bit on the hold when it comes to share buyback. The main reason for that is of course that it is a drain on the liquidity of the Schibsted shares. That's something that, of course, will be monitored depending on the situation going forward. For the financial part of Schibsted, the key takeaways is that we have profit improvement going forward. We have strong growth, we have a strong financial capabilities, and this gives us the reason to continue to grow Schibsted, also being able, at the same time, to pay out attractive dividend to our shareholders. That concludes my presentation.
Okay. Well, Sverre said that we don't invest in PowerPoint presentations, but somehow I think we hope you do. We have now reached 152 slides. There might be still some questions left.
Per Brandskov from Carnegie, just a quick one, because you were talking about the two different business legs, at the same time saying that you have sold off a lot of assets. What about the Media Houses International? What about 20 Minutes and Estonia? Is that something that's up for sale or just laying there?
What we've said is that we're happy with the positions we have in 20 Minutes in Spain and France. We don't have plan to start in other countries, but we're happy with those. Of course, in the long run, they have to perform more better financially, but they've done well in the difficult economic circumstances that reign those countries.
Anyone else? Yeah.
Oddvar Bjørgae, SEB Enskilda. Just a question regarding your stepping up somewhat, your spending on the Classifieds rollout, from around NOK 400 million this year or 2011, to this year being around NOK 500 million. Could you say something about that, how that is connected to being more aggressive into new markets, or if you see tougher competition that you need to invest more, or, I mean, for the good or the bad reasons, simply?
Well, this is, of course, some of the most sensitive information that we don't want to provide to any of our competitors. That's why we're being not too specific on that. I think it suffices to say that it will be a mixture of the different things. We'll launch in some new countries, then we'll spend organically in some countries that we're already in.
Oh, yeah, there.
Hi, Chris Roth from DNB again. Just a quick question. How literally should we take your gearing target? Are you implying that you will buy companies for about NOK 1 billion this year, or should we really expect that this is something you're gonna move slowly towards?
No, as I said, we are comfortable for time being slightly over-capitalized. It doesn't imply that we necessarily need to buy, or actually do an M&A transaction in order to get back to the normalized target level. I think we have some time to get into that situation.
From there.
Sorry, just.
Sorry.
Can I just follow up with that? Naspers, they've suggested that online properties have increased in price quite dramatically over the last few years. Are there any prime positions or properties you see out there which are still up for grabs and that you're likely to move towards in the near term?
no, I mean, we this certainly has mapped a lot of the classified opportunities that we see out there. fair to say that it's not too many, as I explained, and those that could, of course, come up for sale that there are some speculation about is quite large also. the example like Autotrader in the UK that may come up for sale, like maybe the Scout24 Group in Germany, and these are quite large assets. that's the way it is. of course, we would like to do some bolt-on smaller acquisitions, medium-sized. That would be perfect for us.
It's been quite an impressive journey the last decade with regards to what you've done to your online business. Could you share some thoughts with us, you know, what the business could look like 10 years from now in a blue sky scenario?
Briefly.
I think that's a very risky thing to do in this turbulent atmosphere. What you'll see is that we'll continue, of course, to expand the digital business. Then I guess it's a matter of time before the digital becomes bigger than the print online. I think also that when we continue down the road that we laid out today, hopefully we'll be in a good position to take advantage of the different opportunities that arise.
[inaudible]
Torus with Nordea Markets. You have invested in the web TV, especially for the tablets or based on kind of the tablet brands. There are rumors that YouTube will launch heavily in Scandinavia now and that TV on digital platform will be much more, will grow strongly going forward. Have you any thoughts on that, or will that be core to Schibsted to invest in TV on a digital platform based on the web?
Well, you know, I think it's certainly core for VG and Aftenbladet. It has been for several years, and also for the other online news sites to have live pictures. I'm very happy if YouTube launches as they've said they will, because I think that advertisers have been looking for an alternative to traditional TV. If you get the critical mass of web TV, that will help us also.
You see that as an opportunity, not a threat?
I see it as an opportunity, right, for online news sites.
Well, I think that ended the questions.
Yeah, thanks. Martin Stensholm, Danske Markets. Just one quick question. You know, looking at online classifieds, you know, the tremendous growth and the margins that you are delivering, would you be able to say something about the return on investment on any of the sites? Let's say for example, leboncoin has been around for, you know, since 2006. I guess you got the number, but were you able to say something about that? Thank you.
no, I mean, we don't go out with those kind of information, but it's clear that this has been a tremendous return on investment for leboncoin that we haven't spent too many millions to build up that position. It has been different from country to country. France was a star example, a high return, three and a half year to break even. Italy, as I said, is a longer term, has been around five years. We have actually spent more in Italy as an example. Now we also see quite good strong traffic growth in Italy as Terje showed here. It is some differences between countries, and also when you get the influx.
I think the important part is we have imposed quite strict discipline when going forward with the different milestones set up, where the sites are supposed to be after 12 months, after 24 months, in terms of traffic and not least in terms of competitive position. The Terje and his people are monitoring that. That's the important thing for us.
Okay. I think we're finished. I'll leave it. To Felling to wrap up the day.
Okay.
Thank you. It's been a very long day, and thank you for your attendance. To conclude this part of the program, let me just repeat the message that I started the day with. If you look at Schibsted going forward, I think we have classifieds company and a classifieds portfolio in a great shape. Many interesting growth opportunities. We have the financial capacity. I think we have the expertise and the management. We've set ourselves an ambitious target, and I'm confident and optimistic that we'll reach that. For the media houses, Didrik has told you that it's quite a different story up in the Nordics, rather than in the Anglo-American part of the world. We feel that they're in good shape. We'll monitor them very closely and keep investing in quality and product development and the digital transformation.
Finally, Sverre talked about the ecosystem of Schibsted. I think we have in Scandinavia some very interesting opportunities there, most notably now in the personal finance and the payment sector. By executing this, that's how we intend to shape the media of tomorrow today. Now, thank you for your attendance so far. We'll serve drinks here immediately afterwards, then I think we'll meet at the hotel for those going to dinner at the Andaz Hotel, 6:30 for drinks. Finally, I would just ask you to. I would like to thank our excellent moderator, Kjersti, for taking us through this day. She's unfortunately not joining us for dinner because she's going back to edit Aftenposten. I have to respect that. Please help me and give her a big hand.