Earnings Call: Q4 2020

Feb 12, 2021

Good morning, everyone, and welcome to the presentation of Schibsted's Q4 results. My name is Jan Boehje and I'm the Head of Investor Relations. Due to restrictions and to minimize infection risks, We will stream this presentation fully remotely this time. As usual, Kristin, our CEO, will go through the highlights of the quarter and the development in our businesses. Afterwards, Wagner, our CFO will go through the financials in further detail. At the end of the presentation, we will have a Q and A session with a hard stop at quarter past 10. Similar to last time, you need to call in to ask questions. It will not be possible to ask questions on the webcast player. You will find data numbers on the IO website. And please make sure you call in 5 to 10 minutes before the Q and A starts or already now. Christine, please go ahead. Thank you, Jan Boyer, and welcome everyone. So I'll start with the highlights and Schibsted ended 2020 with a strong Q4 driven by a continued recovery after the Contraction at the onset of the pandemic, our underlying revenues grew by 4% year over year in the quarter. And in addition to revenues returning to growth, cost savings led us to a quarterly EBITDA of 665 €1,000,000, which is an increase of 45% from Q4 last year. And the strong results in the Q4 resulted in a Full year EBITDA above last year, and I have to say back in March April, we didn't think that would be possible. So we are very Pleased about that. And furthermore, the Board is proposing a dividend payout of NOK 2 per share for 2020. So if we then move to Slide 4 with the overview, we can see that Nordic Marketplaces, they saw further improvements in revenue compared to the Previous quarter, it's primarily driven by jobs in Norway, leading to total underlying revenues in line with last year after we've seen a decline for the past EBITDA margin came in at 46% in Norway, which is in line with last year and 44% in Sweden, which is above last year. And looking at news media, which is the main driver for our EBITDA increase, we grew 5% in underlying revenues in combination with lower costs. And the revenue growth was driven by continued strong growth in digital subscriptions and digital advertising revenues that improved significantly compared to the previous quarter. In addition, we did receive government grants of SEK 26,000,000 in Sweden, which affects Revenues positively and the execution of our cost reduction program increased even further and margin landed at 14% in the quarter Or 12% if we exclude the government grants in Sweden. Lendo, the main part of financial services, was by the 2nd wave of COVID as banks have continued to be more restrictive in their lending practices. However, profitability improved slightly and that's due to improved cost and marketing efficiency as well as lower expansion cost. And finally, distribution in Prisjakt within Schibsted Growth had another strong quarter and achieved new all time highs due Good and strong quarter for online shopping and as a result of higher revenues, EBITDA increased here as well. If we then look at Slide 5 with the ESG overlook, I have mentioned it Earlier, but it is through our businesses where Schibsted has the highest impact on society and the environment. The best example of that probably is Our contribution to savings in greenhouse gas emissions through secondhand trade in our marketplaces and that effect It's many times higher than our own emissions. And the second hand effect is something we are continuously working on. But of course, in parallel, we will work to reduce our own emissions in line with the Paris Agreement as well, with at least 50% by 2,030. Our main focus is to lower our emissions deriving from our printing and distribution operations and energy consumption related to our digital consumer brands. And according to PVC's climate index, Schibsted was one of only 4 listed company in Norway that reduced its admission according to the Paris agreement in 2020. We're also pleased to announce that we together with other media companies and scientists from Bristol University Just launched a tool that will make us able to calculate the carbon footprint on our digital newspapers for the first time ever. And these calculations will be made for 2020. This is a groundbreaking tool because it hasn't existed before and the First results will be shown in the upcoming Sustainability Report for 2020 that will be published in March. And on the societal side, I'm pleased to say that we now have reached the goal, which was set by the Board in December 2017 Of having a gender ratio of 6040 in the top three management levels, and we now have 44% female managers in the top three layers of Schibsted. We have also launched a group wide employee engagement tool, and we're happy to see that Schibsted employees scored 81 out of 100 on the engagement scale and that positions Schibsted in the top 10 percentile High performing companies globally in the cleaned cohort, so to say. And we're really proud to see these results, Especially during a year which is strongly affected by the pandemic and leading to everyone almost working from home under somewhat difficult conditions. And for the governance part, we have, as I mentioned in the Q3 presentation, launched an investment policy for our NEX Businesses and where sustainability is now included in the screening and acquisitions of potential investments. And the last point I would like to highlight is that we have increased and or maintained our high level in our ESG Greetings and we are proud to be acknowledged as industry leaders in several ratings like by players like CDP and Sustainalytics and also several banks. Looking ahead then, one of our most important ambitions For 2021 will be to further incorporate diversity, inclusion and belonging in our culture and way of work. We firmly believe that there is a huge potential in having a diverse workforce and given the right tools, our leaders can release that potential. And going forward, we will continue to periodically report to you on how we are doing on our ambitions and targets. We can then move on and look at the development of our businesses in more detail. We can jump straight to Slide 7 and start with the marketplaces. As I mentioned earlier, the revenue development in Nordic marketplaces has improved compared to the previous quarter, primarily driven by a recovery in jobs in Norway. And the acquisition of Oikotear is included in the 2020 numbers and is excluding Oikotija and currency effects. And EBITDA margin is in line with last year. If we then go to Finn in Norway on Slide 8, you will see that revenues increased 2% year over year and that is the Q1 in 2020 with growing revenues. All three verticals showed good development in the Q4. Real estate and motor continued the good development and both markets are characterized by This high demand is resulting in more easily sold objects, meaning less need for republishments and upsell products, And that puts some pressure on the ARPA. Looking at the job vertical, we saw a significant improvement compared to the previous quarters. After a very strong December, the job vertical ended up growing revenues year over year in Q4, which we are very pleased About after double digit decline in the previous two quarters. These positive effects are somewhat offset by advertising revenues And particularly by the travel vertical that's still negatively affected by the market environment and travel restrictions. Declining revenues year over year in those 2. Travel accounts for only 6% of Finn's revenue if you look at 2019 figures, But as revenues declined above 80% for that vertical in Q4, the negative impact of Finn top line was obviously strong still. If you look at costs, Finn has started to ramp up investments again to ensure growth going forward. Margin ended at a strong 46% for the quarter and that is in line with last year. If we then at slide 9, look at Finn's KPIs, the chart on the left illustrates the change in volume of new listings compared to the same month in 2019. This graph illustrates the strong improvements in job, and you see the especially strong December month in all three main verticals. Listings are supported by a continued strong website traffic, which you can see in the graph to the right. All verticals beside travel has provided growth in visits compared to last year during the Q4. Let's then move to Blocket and we're now on Slide 10. Here we also saw a positive revenue growth in Q4 after 2 quarters with decline. The growth is driven by continued good development in the motor vertical And year over year revenue increase is it's still driven by an increase in the visibility product Bump in addition to increased December listing volumes. As opposed to Norway, jobs in Sweden is still negative Also within advertising, The revenues continue to decrease year over year, although we see a slight improvement from the last quarter. On the cost side, hiring freezes and other temporary measures have dampened the cost increase, but we have continued to invest in product and technology capabilities, Including transactional initiatives in early phase, examples of that being Blocket Bettalning and Bili for cars And Blocket Paquette for our generalist section. And the combination of increased revenue and temporary cost saving leads to a margin of 44%, which is an increase from last year. If we then look at Blocket KPIs on Slide 11, Motor Listings had a solid quarter. And as in Norway, used car continues to be a shortage during Q4, but despite that December car volumes outperformed last year, somewhat explained by later Christmas holidays in 2020 compared to last year. For jobs, we saw signs of recovery in late Q3. However, the negative volume growth remained unchanged throughout Q4. But remember, however, that Motor is the most important revenue driver in Blocket. Jobs is smaller, accounting for just around 10% of Blocket's total revenues. If you look at traffic, after ending the last two quarters on double digit Let's then move to Finland on Slide 12. I'm pleased to say that the integration of Oikotay and Tori is progressing As planned and the integration phase is now nearing its end. If you look at the financials, this Graf represents the new combined company, including Oikotay in the 2020 numbers, driving the growth compared to last year. If we focus on the underlying development, the Q4 is characterized by an improved trend in advertising with pro form a Revenues excluding currency effects increasing 16% after 3 quarters with year over year decline. The job vertical has seen a recovery in Q4 with almost stable year over year revenues and the good trend in real estate and generalist, they are continuing. On the cost side, we have increased investments in marketing, primarily within Motor in Torrey and we have also ramped up product and tech Staffing to improve products and platforms in order to enable mid and long term growth. This is affecting the margin and pro form a EBITDA declined year over year. If we then look at the KPIs in Finland on slide 13, you'll see jobs showed a continuous recovery through the quarter and also real estate listings increased further compared to the last quarter. Both verticals ended with strong December listing volumes, increasing year over year, even within jobs. The recovery in listings is supported by strong development in traffic and that accelerated further to a growth above 30% in the last 2 months. Please note that the traffic graph to the right that shows the sum of monthly visits in both Tori and Oikotija. Let's then move to Slide 14 and talk a little bit about news media. Strengthening our news positions by driving higher user engagement is an important focus for news media. The last quarter of 2020 brought Several news events that contributed to high traffic to our sites and very high user engagement among our users. The COVID-nineteen situation is still an ongoing news event and our users are depending upon our brands to give them timely and correct Information on the situation. In addition, the U. S. Election and also the natural disaster in the area of right outside Oslo were big news events and All our brands are covering these events in their own way to cater for their main audiences. If we look at financials on Slide 15, news media delivered another strong quarter. This was driven by a positive digital revenue development, which we'll come back to on the next slide, but that was combined with significant cost reductions And an addition of a received government grant in Sweden of SEK 26,000,000. The execution of our cost reduction program of NOK 500,000,000 increased even further with estimated effect 2020 now being NOK 180,000,000 Compared to the initial phasing that was assumed to be a materialization of SEK 100,000,000. In addition, we see generally lower cost levels in news media due to remote and to a large degree more digital ways of working. And let me remind you that the revenue numbers shown on these slides are adjusted for the regional and local newspapers that were divested And so they represent a like for like development, but the absolute amounts in Norwegian kroners are unadjusted. If we look at the main revenue streams then in News Media on Page 16, let's start with subscriptions. To the left, you'll see underlying revenues grew by 9% year over year in Q4. And as in previous Digital subscription revenues continued to grow well. Strong volumes and growth in ARPU are Contributing to the 22% increase in digital subscription revenues compared to last year. And to further grow our digital subscription We are continuously developing our subscription products to cater for user needs and interest and thereby increasing our And in addition, we will continue to experiment with different bundles and new types of paid products. If we then move to advertising, we see advertising markets in both Norway and Sweden continue to show Significant improvement also in Q4, as you can see here on the right side. Print continued to struggle in both geographies, But we are pleased to see that the digital advertising market, particularly in the segment of large national advertisers, has continued to improve. And we see in both markets a growth in digital advertising revenues as a result. I would like to highlight that we continue to see good growth in the FMCG TG market in Sweden also in Q4. The launch of the TV channel Gudore has been a success And the number of viewers has doubled since the summer. And the combination of Goudare with the food and beverage vertical in Aftonbladere Gives a strong value proposition to advertisers within the FMCG segment. Let's Then move to the 3rd business area, which is next. And here I start with Financial Services and Lendo before I go to the growth segment. We can then jump to Page 18 and look at Lendo where we saw that Q4 revenues ended up declining compared to last year if you adjust for currency. Sweden, which is our biggest market Fallendo saw a decline in revenues. There is still growth in application volumes through our service, but the banks are still more reluctant to lend that Was the case pre COVID, so that makes it harder to convert the applications into revenues. In Norway, we do see a small revenue increase and Denmark continues to deliver good growth. Margin wise, though, Lendo delivered another strong quarter. Cost efficiency and reduced investments in international expansion Due to Poland and Austria are important explanations for the improved profitability. And finally, I can tell you that our soft launch in Spain is Progressing as planned. Then finally on Slide 19, we come to growth. And here the positive trends Beginning in March 2020 have continued as Prisjakt, Schibsted distribution and the marketplaces for services, Mittanburg continued to experienced activity levels and demand during the quarter. Schibsted Distribution New Business shows strong year over year growth in the quarter with increasing e commerce volumes also boosted by both Black Week and Christmas. Heltjem Netandl, which is the main Part of that new business has delivered approximately 9,000,000 parcels during 2020, and that is an increase of 135% for the full year. Prisjak showed a solid Q4 growth year on year due to high growth in traffic and clicks With the same trend in e commerce that we see in Schibsted distribution and also by the boost from Black Week and Christmas. So on that good note, Ragnar, I'll leave it to you to talk about the financials. Thank you, Kristin, and good morning, everyone. I will give you some more details on our financials in the Q4. So let's start with Slide 21. Looking at the consolidated results for Schibsted Group, We see that Q4 revenues grew 4% compared to last year on a foreign exchange neutral basis to NOK 3,600,000,000 EBITDA, as Kristin highlighted in the beginning, was very strong in the 4th quarter, growing 4% from last year to 665,000,000, resulting in an EBITDA margin of 18%. As you see in the graph to the right, all business areas are contributing to the improved EBITDA, But it is primarily the improved revenues and cost reductions in News Media that is driving the increase. As mentioned, News Media received a government grant of reflecting EBITDA accordingly. Looking at Nordic Marketplaces and Growth, their EBITDA increase are both driven by higher revenues, While the increased EBITDA in Financial Services are driven by improved cost efficiency combined with lower geographic expansion investments. On Slide 22, I think it's also worth looking at the full year 2020 and may present the Q4 results. The strong results in the 2 last quarters resulted in an EBITDA of NOK 2.1 NOK 1,000,000,000 in 2020, NOK 149,000,000 above last year. And we also saw a slight underlying revenue decline of 3%. Despite uncertainty and negative effects caused by the pandemic Throughout there, all operating segments experienced EBITDA growth, except for a smaller decline in Nordic Marketplaces due to substantial revenue fall within particularly the travel and drug verticals throughout most of the year. We are very satisfied with ending the year with proven resilience in all of our business areas and that we achieved solid financial results In a year characterized by high uncertainty. 1 year into the pandemic, our businesses are in good and some in even better positions, And I'm confident that we are we by being highly relevant to our customers are well positioned for delivering on our stated growth ambitions. Going back to the Q4 on Slide 23. Our operating profit for the quarter ended at NOK339 million compared to NOK168 million last year. The operating profit was impacted by net other expenses of $54,000,000 which is mainly due to transaction costs in connection with acquisitions of Oikotija and EBIT Denmark, but also restructuring Costs related to some headcount reductions in news media. The reported tax rate is slightly above 16%. Taking into considerations non deductible impairment loss and reassessment of deferred tax assets Made this quarter, the underlying tax rate is stable at around 23%. Profit and loss from discontinued operations is net loss from Adevinta, adjusted for amortization and depreciation For the period, Adevinta is classified as held for sale. This adjustment had a positive effect in the amount of 550,000,000 after tax in the Q4. Adevinta presented their results yesterday, so please refer to their Looking at Slide 24. Operating cash flow in the 4th quarter increased 18% compared to last year, driven by the stronger EBITDA, partly offset by increased tax payments in the quarter compared to last year. Capital expenditure was NOK 40,000,000 higher than last year due to increased investments into product development, primarily in the Nordic Marketplaces and Next segments, but also higher CapEx in headquarter due to ongoing implementation of new group wide ERP, Treasury and HR systems. On Slide 25, you can see that our leverage, which increased to around 1.7 following the acquisition of Oikotie in Finland in the 3rd quarter improved and ended at around 1.4@theyearend. And an improvement was driven by the strong EBITDA and cash flow results in the quarter. Our cash balance At year end, it was around NOK 1,300,000,000. To finance the acquisition of EBIT Denmark, We have signed a bridge loan facility of €350,000,000 Following the acquisition, our gearing will increase We have received consent from our banks for a temporary waiver of the Financial Covenant from closing of the transaction until the bridge loan is repaid. And as informed about earlier, we also, in our agreement with eBay in connection with the other winter eBay transaction, Have an option to sell to the market up to 3% of our winter shares to repay this bridge facility. Then looking at our financial targets and policies on Slide 26. Looking ahead, our financial targets are unchanged from the Q3. In the Q3, we raised our margin target in News Media to 8% to 10% in the medium term, and we maintain that. But please then remember that this target presumes a rather normalized advertising market going forward. Also in Nordic Marketplaces, we keep our medium to long term target to grow annual revenues with between 8% to 12%. Looking at the start of 2021, uncertainty has increased somewhat short term unexpected volume developments compared to the positive trends that is to across all our businesses towards the end of 2020. This increased uncertainty is due to the stricter lock from governments as a result of the new mutations of the COVID-nineteen virus that is now spreading. And as Kristian mentioned at the start, the Board is proposing a dividend payout of NOK 2 per share for 2020, which is in line with our dividend policy. And on Slide 27, On a final note, I'm very happy to invite you all to our virtual Capital Markets Day on 11th March, starting at 10 Central European Time. The group management team will give an update on our strategy and initiatives to drive further growth. That ends our presentation for today. And with that, I'll turn the call over to our operator who will organize the Q and A session. So operator, please go ahead. Thank We'll take our first question from the line of Silvia Kuneo from Deutsche Bank. Your line is open. Please go ahead. Good morning and thank you very much. I'd like to ask 3 questions. One is about jobs. The business saw Good development in the Q4 in Norway and the number of listings improved in Finland, but continued to be down in Sweden year on year. Can you please highlight what are the differences among these markets to better understand why the recovery pace is not the same across the three And remind us of the different revenue models like subscription driven versus volume driven. Then the second question is about your plans To develop the next generation of marketplaces and expanding into new concepts. I'm sure you will talk About this more detail at the CMD, but as these will be 2 of the 3 drivers of growth in the medium term as you flag in the outlook, Can you please just share some more insights about what progress you are making in this direction and how the economics of the business could change? And then finally, can you please help us think about growth in digital subscriptions within news media Going into 2021, growth accelerated in Q4, so just wondering whether it is sustainable And how the subscriptions work in terms of renewal periods and market opportunity in terms of current user penetration that you see. Thank you. Okay. Shall I start and you can fill in, guys? Starting with jobs, frankly, we don't have a very good explanation why the development was so different In Sweden in Q4, we saw a slight uplift towards the end of the third quarter, and I think we had expected that To continue somewhat, which it didn't, it sort of flattened out and Q4 remained flat. Macroeconomics and COVID sort of waves come and go at a bit, you know, at somewhat different paces in the different countries. That might explain some of it. But, But it is a bit strange. I think though it's fair to say that the uplift we saw in Norway is in December and you saw the underlying The ice there was quite exceptional. So, you know, you might need to, let's say, withdraw a little bit As an exceptional effect in Norway, but still it remains that the development diverts somewhat in Sweden and Norway. And I don't really have the good explanation for it. When it comes to next generation marketplaces, yes, obviously a very important part of how we are investing and rethinking our Business. We are working, I would say, especially within the car vertical where we in Norway now have The new concept of NetBILE, which is progressing really well, and we also have that launched in Sweden under the name of Veely. But also In our, let's say, general vertical, we have introduced new tools for Contracts for registrations, for safe payments, insurance, etcetera. So we are really facilitating that you can do this whole transaction online. And we are, looking into how we can make that user journey even more seamless and where we can play A better role in a larger part of that entire value chain, which is the transaction of a car. So basically lots of different initiatives along that whole value chain to boost That and within generalist, of course, there is a big untapped potential in turning more of the shippable generalist Categories over to a transactional model. And having a strong distribution business in Norway, we also see good synergies For making seamless customer journeys, combining those. So that's that's an important area for us. And then you asked about growth in digital subscriptions. Well, They have continued to grow very consistently for a long time now and we don't see a slowdown. And of course, the you could say the market is penetrated volume wise in a way, but we see that there is so much more potential also in Combining the bundles and being able to offer what the different customer groups are willing to pay for in even smarter ways. So I'm very optimistic on the growth of our digital subscriptions going also forward. I don't know if you'd like to add anything. And can I just ask yes, A quick follow-up on the JobSu side? Can you please remind us how the revenue model works In terms of Fabrypfsen versus volume driven in the different markets. Thanks. Yeah. You want to do that 1, Jan In general, if you look in, I mean, Fin is the biggest one, you're right, but also Block it both have a like a per ad model. So it's not a subscription model Like you see in other markets by competitors, and then also I saw the development in 2020, right, it's maybe a bit more volatile And it really reflects a bit the development of the market development in the specific countries, which then improved throughout 2020. Thank you. We'll take our next question from Lisa Young from Goldman Sachs. Your line is open. Please go ahead. Good morning. Thanks for taking my questions. The first one is on News Media as well. I mean, the growth has been, I guess, really impressive in the last So I'm just wondering like do you think we're at the point where this business can actually sustain a positive growth Going forward as well, like 2021 and beyond, whether we sort of reached a point where the mix is now favorable And you made the sort of right changes to, for instance, your digital advertising systems. Any color there would be really helpful. And just actually on news, the government grants that you booked for Q4, should we expect more Grants going forward or that was just for the second half? The second question is related to Finn. Your business did much better than your guidance of 45% and it did around 47%. And you actually gave a margin guidance For FEED last year, so I'm just wondering if you can give us a bit more color in terms of how you think that margin for FEED could evolve in 2021? Should we see basically further margin improvement, if the top line recovers or is there any sort of investments or costs are coming back, which could potentially put pressure on that margin. And the last question is on advertising. I'm just wondering why the advertising performance in Nordic marketplace, especially now in Sweden, It's actually doing much worse than in the news media segment because I felt like overall like advertising trends should be more or less consistent across the board. So I'm just wondering if there's anything structural there and how do you see the impact of the future privacy changes? Thank you. You're muted, Kristine. So classic, I'm sorry. And to start with the to the your question on media, Lisa, yes, I think as I said on the last question, I'm very optimistic about user revenue and digital subscriptions. When it comes to digital advertising, I believe we still need to be a bit cautious on that one because it is volatile and history has shown us that the transparency It's not the best, and things can change quite rapidly and sometimes for no good reason. So I want to be a bit Cautious still on digital advertising. However, I have to say that our organization is working really well with it. We have launched several new products that's gaining good traction. We have become much better at using data in a good and safe way. We have become better at contextual advertising and I believe That, you know, the the awareness of the attractiveness of having, that type of, let's say, A premium advertising channel that we represent, especially these days with a lot of issues around context, etcetera. I think that's improving. So I'm also optimistic in terms of advertising, but I want to be a bit more cautious on that, given the visibility of it. I also need to give credit to our News Media division that their operations and just their excellence Fusion is really quite fantastic both on the editorial side and in terms of building both advertising and user business around that and with a very strong cost So I think we are at least that division is in the best hands to be able to execute going further. And finally on that note, you know, really what we need to do is to be able to better capitalize on the huge digital footprint That we hold within that division and the force of, you know, innovation in new formats and to young user groups and for example, what we're doing now with live pictures and with podcasts, etcetera, I think all these things will also help us find new growth going forward. When it comes to government grants in Sweden, I you know, that's obviously out of our control and out of our hands to What the government decides to do further, but I think it's fair to say that with the mutation of the virus, the COVID Situation at least has not improved. So maybe that might be a background for the government Thinking it's the right thing to continue that type of support, but I'm guessing I do not know that and we haven't received any clear signals About it yet, so. And then on the Fin margin, yeah, I mean, obviously, having Having the growth coming from the job vertical is a boost to margin, given The job vertical is maybe the most efficient, let's say high margin business of everything we do within the Fin space. So that helps. And if we see a continuation of that recovery, that will also help margin. At the same time, I need to say that we have, we do now allow for Smit, in Fin, as you know, we did slow down after the onset of the pandemic and it is really important that we do not lose Momentum within product and tech in Finn, especially at this time where it's so important to manage the transition over to more transactional models. And that will put some pressure the other way on margins. So I don't think I can be much more specific than that, Lisa. And then I would like to or the last one was on advertising. Then I think you need to take into account that the branded advertising on Finn, especially is Often related to the travel vertical and of course travel with a restriction has been a completely dead market. So I think some of the has to do with the type of advertising that has been in the different channels. And where we see the strong growth now on our media platforms Mainly stemming from the national more sort of branded goods advertisers and they are not as prevalent on the marketplace platforms. So you find at least some of the explanation there. Just go ahead. If you can maybe also comment on that, If you're expecting any impact from the changing like third party cookies and all those things like Any any any thoughts on the advertising? Yes. Yeah. Look, I mean, that is a development that we are following very Carefully and, you know, we do have quite a lot of first party data, which means that we are maybe a bit less vulnerable to some of that And other players and we are working hard to improve the contextual advertising business, Which is also a way around it. But look, I mean, it's happening and it's happening quite fast. We're following it very carefully and we're doing everything we can to minimize negative impact from that. Thank you very much. Very helpful. We'll take our next question from the line of Mariam Adisa from Morgan Stanley. Just to follow-up again on the News Media margins. Just Wondering how we should think about the cadence of margins in the short term and how quickly some of those temporary cost savings will return. So should we still expect Margins to be above the 8% to 10% range this year. Should we see sort of the Q4 as an indication for what margins may look like for this year at least? And then secondly, on the ARPU development in classifieds, you mentioned some of the difficulty of upselling in motors. Just wondering how you're thinking about the contribution to growth this year from pricing and upselling, perhaps if you could comment on some of the pricing conversations you've had so far for this year and how you're approaching that? And then finally, just on Finland, just wondering how we should think about the margin trajectory there and when we should expect synergies to come through? Should we expect that there'll still be quite heavy investment into product marketing this year or is that the potential for synergies to come through this year? Thanks. Okay. I'll give it a go and then Emboella or Ragner you can fill me in on this. When it comes to news media, I think these days it's very difficult and dangerous to make much projections. I'll start by saying that. But things look good into the Q1 and advertising is holding up. So I think it's Fair to estimate that also the Q1 will be strong. Whether it will be as strong is hard to say, but I think continued strong development at least in the Q1. And I don't dare really to predict anything beyond that. When it comes to your last question on Finland, As I said, we've been focusing very much on the integration work, which is now into the final phase, meaning we will be able to Focus more on the go to market from now on. And we are in an investment phase. It's quite clear that we To improve both, you know, the capabilities on the product and tech side there and make more differentiating features to our different offerings. But we do have good development. I believe one really important thing is to gain share and become number 1 in the real estate market. So that is a priority. And as you know within Tori, we have this year Invested quite a bit in improving our offering towards the car dealers and we have seen good traction on that. So hopefully, we will be able to continue Growing the motor segment organically somewhat through the Tory efforts. And then of course, We also have jobs and generalists. So, a lot of good underlying KPIs in Finland, as you saw the Strong traffic growth. I think the organization is really tuned on and the developments and things are happening fast. But 2021 will be a year of investment. So I would watch maybe the revenue more than the EBITDA for 2021. Okay. Now I forgot your question about the pricing. Maybe you can do that one, Jan Yeah, I think overall in a way, I think there's no change when it comes to pricing strategy for Nordic Marketplaces. Like you saw, like volumes are coming back. And over the last years, like upset has become more and more important for the business. And we're working on these initiatives. And you saw, for example, in Q3 and Q4 results of that to have a higher share on that going forward. At the same time, one thing is which has After I think in the end of Q3 and also into Q4 is that the motor vertical has quite a Hop development, meaning like there's super high demand for cars in 2020, meaning that inventory actually in both Norway and in Sweden It's so high that there's not enough supply. And that means basically an upsell for the verticals maybe not so much needed In Q4 in comparison maybe to the start of 2020 and we just have to see how that continues, but it doesn't mean that we don't have the relevant products Or that we have a bad position. It's just it's going so fast and turnover is so high that it's not needed. I think that's a comment I can have. We will take our next question from Anik Mas From Exane BNP. Your line is open. Please go ahead. Good morning. My first question is on M and A now that we've Integrated almost entirely your previous acquisitions, where you still see a gap where you could fill it in with a bolt on? And also if you could maybe comment on how the competitive landscape has changed since 2016 when we last tried to handle that deal. My second question is on Nordic Marketplaces. If you could just comment on the Q1 trends you are seeing here, Is there any big distortion versus what you've seen in Q4? Thank you. Okay. Hi, Annik. Look, on the M and A, we believe that we believe there are exciting opportunities Still in Finland for further consolidation, and we are very carefully scrutinizing that market. And as you know, we haven't even closed Denmark yet, but once we get going in Denmark, I think we will We find interesting opportunities there as well. So we are excited to get started there, hopefully, soon to look at that. When it comes to Hemnet, so on the regulatory side, you're absolutely right. We were denied to acquire that back in 2016. What has changed since then is that we haven't had real estate for sale on Blocket The regulatory authorities would then acknowledge as a different situation is, probable, but hard to Tell. So you never really know, but at least that is one thing that has changed. When it comes to HEMNET, I think We will have to see how the current owners decide to proceed. And it both needs to be available and it also needs to be at an The price, but I think it's no secret that it is an asset that would fit very well into our portfolio. But anyway, we will just have to see about that. And then finally, the outlook for Nordic Marketplaces. Now I would say also within Nordic Marketplaces, things are A bit more volatile than normal. And as I already said, I mean, I do think that the quite extreme boost we saw In December, might not necessarily continue at that same level, but we have seen sort of A steady recovery over the last months and we hope That this will stabilize more and more as we progress. And we are also Karen, you know, we're working very hard within our own organization to compensate for any shortfalls with upsell products and and The different new offerings that help boost value to our users. So we are doing everything we can to compensate as well. Thank you. We'll take our next question from the line of Markus Debo from JPMorgan. Your line is open. Please go ahead. Yes. Hi, everyone. Yes, congratulations for these results. Again, it's encouraging to see that digital subscriptions are really continuing to grow. The questions I have, one is for Kristin in regards to M and A. I understand your comments on the previous question. My question is more in regards to leverage. How far would you go if the right targets would arise? If you can help us on the kind of like leverage ratio that you would Yes, by post Denmark, that will be quite helpful. 2nd question is on C2C and the Opportunity from Transaction Services in that vertical. Adevinta, yesterday at the presentation, which I'm sure you followed, What was indicating quite a meaningful opportunity in this regard. What are the kind of like Low hanging fruits on your side, and particularly when it comes to Fin, how much you see additional opportunity in this regard from also implanting, implementing Relatively similar services in C2C. And then thirdly, if you could just comment more shorter term, it sounds like the trends that you were showing in terms of Motors and also recruitment, they are more or less growing at the same rate in January, Hi, Bri, what are the latest developments? It would be quite helpful. Thanks a lot. Can you repeat that last thing about motor, please? Just the latest trends, you gave the indications of the development and strong rebound in trends in And I just wonder if we just go now into January, February, obviously, we had some more tightening and lockdown measures. But is this trend Kind of still ongoing at the same pace as in November, December or is there any form of a slowdown? That's more a question source of term. Yes, yes. No, so I'll start with the Motor. So Motor, I would say, is December was a bit exceptional, as I also mentioned, because there is a general situation that The inventory levels are really low and the markets are quite hot, which is not always an advantage for us because it means less demand for re listings, right? So, but I was so I would say treat December as a little bit, that was sort of a boost, but the underlying trend is okay, is how I would describe it. And then when it comes to C2C, yes, let me say that I think it's very encouraging what especially Le Boccois is achieving Within transactional in the Adevintas fair, very happy to see that development and it's a that's a great inspiration to us as well. Within the C2C space on our generalist sites, we do see a good potential for developing our transactional business. And I would say that goes Just as much for Blocket as for Finn actually. And as mentioned, we are working now to make these customer journeys as seamless It's possible. We are trying to find out, you know, how to best position it within the different categories because you have you have a lot of different categories. It doesn't work as For a sofa, it works for a phone, for example. So, you know, you need to have different approaches given the different types of categories that you have within Generalist. Very important to get in place the smooth payment, escrow, delivery services, etcetera. So that's another thing that's Going on and the potential here is quite large. I mean the gross amount being traded through our channel is absolutely huge. And if you get into a model Where you get even a very, very small part of that as a transaction fee, it can become a very interesting business. However, mind you, with a different margin profile than what we Currently, how? So that's also part of the picture. And it's going to take us some investments to get there. But this is very high on our agenda. And then the last question was that on leverage. Yes, I could answer that, but maybe this is a good opportunity for you, Ragnar, to say something. Yes, I can give a short comment on that. As I said in the presentation, the leverage, We have a leverage for the time being around 1.4, and it will increase to around or close to 3, and we have done the We closed the eBay Denmark acquisition. I think The way we have financed eBay Denmark, so coming to an agreement with the banks on Bridge financing sort of shows that we have some sort of additional flexibility around the leverage the actual level on the leverage. But in addition to that, we have in the agreement with eBay also an opportunity to sell down 3% of the Avinta shares to reduce the bridge loan. So yes, we have some flexibility, but I will also say that sort of mid- to longer term, it is clearly our policy that we will stay in the range of around 1 to 3. But with some added flexibility around the timing of Yes. Maybe as a follow-up, I just Think about it, given current developments in the M and A market in Scandinavia, it's a bit of a timing issue, it's Given Denmark, which will boost your leverage, and maybe at the same time, a good opportunity might arise. So the question is, Would you be willing to, in the short term, accept a leverage ratio of well above Four times or close to 5. If good opportunities arise, obviously, leverage will come down again. But given the timing, You would be happy to lever up short term a lot if the right opportunity arises. Is that how to read your comment? I think it's correct to say that we will be we are willing to go some up above 3 to 4, which is sort of the level that we have in the policy. As we also said that we have sort of as long as we have the have a Drawing on the Bitch loan, the banks have waived financial covenants today, so they will not sort of come back in place until they have repaid the Bitch loan. So, let's answer that. Okay. Thanks a lot. Hi, speakers. We have one final participant. Would you like to take that question? Sure. Sure. Thank you. We'll take our next question from the line of Erik Rothdahl from Carnegie. Your line is open. Please go ahead. Hi, guys. Thanks for taking my final question while I haven't been answered. Just Two very quick ones at the end here. Kristin, you mentioned net new in Norway. Can you just give a kind of quick regulatory And the final one is on Blick, which grew more urgency over the year. And you will note that some of the cost savings are temporary and we've been striving previously that's a new to investor, just kind of how Yes. Okay. Your line was a bit bad, but I think your first question was The status on Nat Net Bill, right? Is that correct? Yes. Yes. Okay. Yeah. No, so okay. So we filed a complaint To this commission that sort of oversees the competition authority and that was filed in December and we had a response From the competition authority, so that is now with that commission. And we expect a ruling from then within probably some 2, 3 months' time or something. So that's what's happening now. And and while they are doing their deliberation, there isn't really anything going on Outside of that, of course. And then when it comes to Blocket, I mean, look, Blocket is in a I think Blocket has a lot of good things going. It is important to keep investing in capabilities in Blocket, but we're also trying to stay very Focused and not do too much at once. And they have, you know, some strong priorities that they are focusing on, and I think they're progressing well with it. And I'm very encouraged By their results in 2020 overall given the difficult circumstances, I think it's great to see that they continue their growth In the motor vertical, and that they, you know, they've been able to maintain the momentum that they've had there. And of course, it's A very important part of their overall business. I'm excited to see what they can achieve in terms of transactional On the general side, generally side in addition to motor. And they also have progress on the Casa concept Within full service rentals, although it's still quite small numbers, the progress is good. And jobs, I mean, I wouldn't rule out jobs. It's been a hard year for jobs, but also here Blocket has actually increased and improved their offering quite a lot Product wise, so I think when the macro trend turn, they will be in a good position to capture a good size of that recovery coming their way. We have one more question from Andrew Ross from Barclays. Your line is open. Please go ahead. Great. Thank you for squeezing me in and good morning everyone. Mine is just a follow-up on Markus' question on M and A and to ask the exact So my understanding is that you can sell up to 3% to fund Denmark, but can you break the lockup to some more Should a bigger deal come on the horizon for you over the next couple of months? Or can you not do that? I mean, you would need to borrow against the out of interstate So in short, we can sell up to 3% after the lockup period. But we are not in a position to sort of directly sort of break the lockup as such. So that's a lot of opportunity in the short term. So if we are going to sort of pursue attractive M and A opportunities that are challenging over, let's say, our financial capacity or challenging the thresholds that they have with banks, And we need to sort of find a solution together with the banks. And that is sort of the frame the opportunities that we have. I think I'll just also then reiterate that So then we draw on the bridge facility connected related to the eBay Denmark transaction. Then we have a waiver from the banks on the covenants until that loan is repaid, Meaning that the comment as such is not sort of a threshold for some flexibility in the time to come. Thanks. That's helpful. And could you just remind us how long the lockup is for on the 3% from Denmark? I think we have a lockup. When might you sell the out of interstate? We have a lockup. We have a lockup, 3 months from the sort of closing of the transaction. And after that, the sort of there is a 15 months period where eBay has a right of way if they want to sort of sell on some of their shares. But in parallel with that, we have the opportunity then to sell the 3%. And we have sort of a carve out for the 3% with no restrictions. Thank you. It appears we have no further questions at this time. Please go ahead. And that concludes our Q and A session for today and the presentation. So from my side and also the whole management team, thank you very much for joining and talk to you soon. Thank you.