Good morning, everyone, and welcome to the presentation of Schibsted's Q3 Results. My name is Jann-Boje Meinecke, and I'm heading Investor Relations. After presenting our presentation fully remotely for several quarters, it feels great to be back here at our headquarters. As usual, Kristin Skogen Lund, our CEO, and Ragnar, our CFO, will present the results and progress for the quarter. Afterwards, we will open for a Q&A session, and like last time, Christian Printzell Halvorsen, EVP Nordic Marketplaces, will also join us. If you want to ask questions, please go to slido.com and enter the event code, which you can see on the first slide. With that, please let me hand over to Kristin Skogen Lund. Please go ahead.
Thank you very much, Jan- Boje, and welcome, everyone. Let me start with the highlights before we have a closer look at the development for the quarter. I'm happy to share that we continued our positive development in the third quarter with an underlying revenue growth of 11% ensured by an increase in revenue across all segments and a strong EBITDA margin of 21%. Nordic Marketplaces had a good development driven by the job vertical. The strong rebound in revenues over the last quarters demonstrates the strength of our marketplace built on strong brands and strong market positions as well as continuous product development. On the contrary, Denmark had a soft quarter, but I'll come back to that shortly.
If you look at News Media, Q3 was a strong quarter for advertising, and our subscription business achieved a new milestone of 1 million pure digital subscriptions, something which actually no one thought would be possible when we first launched Aftonbladet Plus some 18 years ago. Lastly, Distribution and Lendo made good progress in Q3, and our venture business had an eventful quarter with a good deal flow and the listing of the learning platform Albert on October first. Now, let's look at our ESG achievements in the third quarter.
As I mentioned before, we have joined scientists from University of Bristol and other media companies like BBC, ITV, and also Netflix to develop a model on how to calculate our environmental impact from our digital news all the way through the digital value chain from the content is created, on the distribution journey to our readers, and when our readers are consuming it on their devices. The calculations show that the majority of the emissions are generated in the last part of the value chain. The genius about this tool is that we can now use it in our product development to make sure we give our products a lower footprint, and we have, of course, now come up with a great plan for how to do that. As a tech company, use of IT equipment is crucial, but that also has an environmental implication.
We now have an action plan for how we can reduce this impact caused by the use of our in-house electronic devices, and this is also a good business case from a financial perspective. If we move on to the societal impact, we are pleased to have our Head of Diversity, Inclusion, and Belonging, Sumeet, on board. He is in full speed with his work, and he is now mapping out how we're actually doing in this area, and he has started that work in two organizations at Schibsted. Our ambition is to manage this well so that we can use this to our advantage to boost innovation and value creation. I'm also very satisfied with the employer engagement survey and our results for Q3. We are delivering on our ambitious goals and even beyond.
If we compare to international benchmarks, we are in the top 10% of the best companies there, so. This is really important to us. As we know, we are in a situation where there is a real fight for talent, especially for tech people. Related to this, I'm very pleased that we recently got ranked as Sweden's second most attractive employer for IT talents. Related to governance, we have performed a materiality analysis for Finn and Prisjakt and identified the current sustainability status and the potential going forward, of course, with a focus on how sustainability is linked to their strategy and can be used as a lens to finding new business opportunities. Lastly, we are continuing to screen our venture investments from a sustainability perspective. This quarter, we invested in two companies with a clear sustainability link to their business model.
Tibber, helping people to reduce their energy consumption and cost, and Seed that offers female hygiene products as a subscription. In addition to that, Seed donates money to organizations work to make it possible for young women to go to school during their period in parts of the world where safe period protection is not readily available. Okay. Now, I will start presenting the development of our business more in detail. As usual, we start with Nordic Marketplaces. If you look at the financial results for Nordic Marketplaces, Q3 was another strong quarter, both on the revenue and EBITDA side. As in previous quarters, the revenue increase was driven by our professional customers in Norway, Sweden, and Finland and particularly within jobs. As of July first, Denmark marketplaces are consolidated into Schibsted and accounts for 10% of the total revenue in the quarter.
The acquisition of Denmark and also Oikotie is included in the 21 numbers, affecting growth positively. Though the 18% and the 14% respectively that you see there of revenue growth in the left graph, that is the underlying revenue development, including pro forma figures for both Denmark and Oikotie revenues and excluding currency effects so that you can better compare the numbers. The strong top line led to a 2 percentage point increase in margin, even though the total costs are increasing somewhat as holdbacks in marketing and investments now have been released. I would like to highlight the recent listing development in the job vertical, which is also the main driver for the strong revenue growth in Nordic Marketplaces in Q3. As you see from the graph in this slide, all countries showed good volume developments in jobs in the quarter.
If we compare to the last quarter, it's natural that total listings declined in Q3 versus Q2, and that's due to seasonality with summer and vacation times. However, in Finland, volumes actually kept increasing and reached a new all-time high in Q3, driven by strong sales efforts combined with a market recovery. Within all other verticals, we saw some mixed performance between the verticals and the countries, so I will come back and comment that when I present each market. If we then start with Norway, Finn had another quarter with strong revenue growth. As mentioned before, and in line with Q2, the growth was primarily driven by high volumes and improved ARPA in the job vertical. Of the total Q3 growth in Finn, jobs stands for 65%.
Motors is also delivering a good performance in Q3 with increasing volumes as the previous experienced imbalance between supply and demand has narrowed somewhat in the Norwegian market, but that is a trend that we have not seen in the other Scandi markets. In addition, strong growth in Nettbil supports the performance in motors. Advertising also contributes to the revenue growth and continues to grow well, also compared to pre-COVID levels, ending Q3 with a year-on-year growth of 30%. The travel vertical saw continued higher revenues during the quarter, in line with reduced travel restrictions in Norway, and that resulted in a year-on-year growth of NOK 8 million in the quarter.
Now, real estate is the only vertical with declining revenues in the quarter, mainly driven by lower number of new ads, and that's due to the economic environment where we now see higher interest rates ahead, and this is also following a period with very high activity. On the cost side, investments in the transactional journey continue to be of high priority, but we are still experiencing a demanding job market for tech talents, and that results in some unfilled demand in the short term. This, combined with a high revenue growth, led to a strong EBITDA margin in the quarter of 54%. Going forward, we do have a clear ambition to increase recruitment and investments to ensure our growth ambitions.
If we then move to Sweden and Blocket, I would again like to remind you that Blocket was not as affected by COVID last year and managed to deliver revenues on par with 2019 for the full year 2020. Despite this, we saw a 6% revenue growth in the quarter. This growth is primarily driven by jobs and motor. Job is the key driver where we see both volume recovery and an increased ARPA due to the new price and packaging model that was launched in Q4 2020. The growth in motor is driven by higher professional revenues from the premium product Bump, while listing volumes remained in line with last year. C2C classified revenues from our generalist business declined this quarter, and that's due to lower volumes and simplified pricing model which we implemented in August.
The new pricing model has only two price points and helps to prepare for the continued transformation to a next-generation marketplace with focus on maximizing transactional inventory and seller stickiness rather than listing fees. Revenues from advertising are at the same level as Q3 last year and still not quite back to pre-COVID levels. If you look at EBITDA, the margin is slightly below last year as the growth in revenue is partly offset by increased investments in marketing and product development. Let us move to Finland and Oikotie and Tori. In Finland, we experienced strong growth in classifieds across all verticals. Looking at the financials, the graph now includes pro forma numbers for Oikotie in 2019 and 2020, meaning that the yearly development is comparable.
The 6% growth in the quarter is primarily driven by increased volumes within the job vertical, but we also see continued good traction in real estate cross-traffic from the integration between Tori and Oikotie. By combining Tori's strong regional traffic with Oikotie's leading traffic in the capital region, we have really strengthened our national offering to the realtors. Advertising revenues, however, were down year-over-year, and that is driven by platform migration from Sanoma in the quarter, resulting in some product capability that are no longer in production. Comparing to 2019, total revenues in Finland are 3% behind 2019 levels despite the strong growth in classified and, you know, that is our main focus area for both product development and sales effort.
The decline is driven by the advertising revenues where marketing formats from Sanoma that we no longer have in 2021. While those formats actually contributed to a large share of the advertising revenues back in 2019. On the cost side, we continue to invest in marketing, primarily within real estate in Oikotie. 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 that's leading to a 1 percentage point decline in EBITDA margin year-over-year in Q3. We move to the final marketplace market, which is Denmark. The presented numbers on this slide also show a like-for-like comparison, including pro forma numbers for 2019 and 2020 before Schibsted took over the ownership.
As you can see on the declining revenues, the challenging market conditions which are highlighted last quarter, they have continued in the third quarter, and they affect all main revenue streams. Car dealers continue to be affected by low inventory and high turnover, and this results in a decreasing number of ads on Bilbasen and a high turnover, which again affects classified's revenue negatively as the business model is monetizing ads time on site. This is somewhat offset by increased ARPA, driven by continuous sales efforts by our sales team there. If we look at the generalist business, the third quarter was affected by the reopening of the Danish society, which led to decreased traffic and volume levels. Again, these were extraordinarily strong last year. We also see a decreased demand for shipping. Lastly, advertising was down compared to the same period last year.
That's driven by price pressure within programmatic, and we also see that car dealers are holding back spend due to these high turnover rates. EBITDA came in lower than last year as a result of the revenue shortfall and higher costs. The latter is driven by the transition from eBay to Schibsted and the fact that we now will have a period of double cost in some areas. At the time when we agreed to acquire the Danish operation from eBay, we knew that we would need to invest in that business to capture its full potential. We could not, however, foresee the currently challenging market conditions. The presented numbers might look challenging, but we remain confident about the great growth prospects for this business based on very strong brands and market positions as well as a focused product development by a competent team.
Okay, we move to News Media, and I would like to start with congratulating these two young ladies who were named on the top 30 list of the world's top young talents in the media industry by the INMA Association. We know that we have many talents in Schibsted, but I think that, you know, Schibsted really standing out with two colleagues on this list really is a testament to that. Shirin, which we see here to the left, is Digital Business Developer at Aftonbladet. Agnes, she is a Responsible Data and AI Specialist, and I am really proud and happy to have them on our team. If we then move to the financials, News Media delivered another strong quarter driven by solid revenue growth.
As last quarter, it is primarily a positive sentiment in the advertising market that is driving the high growth in combination with continued good progress for our subscription business. To build on this trend and grasp the growth potential for this business, we have started to ramp up investments in strategic initiatives. Examples are investing in content such as entertainment and sport rights, as well as increasing our investments for podcasts. In addition, temporary cost savings related to remote work have started to reverse, and as a result and in line with our expectations, costs increased year-on-year, leading to an EBITDA margin of 13%. If we then look at our main revenue streams in News Media, first, subscriptions, where total underlying revenues grew by 8% year-on-year in Q3.
As in previous quarters, digital subscription revenues continued to grow well 21% above last, somewhat positively affected by the acquisition of Podme. This growth is despite very strong comparable figures from last year driven by COVID. As in previous quarters, both strong volumes and growth in ARPU are contributing to the overall growth. If we move to advertising, I am very pleased to say that we continue to see substantial growth in advertising revenues in both Norway and Sweden, and that digital advertising revenues in Q3 are well above 2019 levels. There is positive sentiment in both markets, and the focus on first-party data across the whole advertising value chain is becoming more evident, and Schibsted is well-positioned for future growth in the advertising market as we have access to first-party data throughout the Schibsted ecosystem.
Video content and premium display are contributing to the strong growth in both markets, and our fill rates continue to be higher than normal, benefiting particularly Aftonbladet and VG, VGTV, as they have the largest volume of inventory. As a result of our new organizational structure from July first, e-commerce and distribution is now reported as a separate segment, reporting to our EVP for Nordic Marketplaces. The e-commerce and distribution portfolio consists of the legacy newspaper distribution and the new business operations, which are mainly Helthjem Netthandel and Morgenlevering. The new business part of the portfolio continued to deliver solid revenue growth in the quarter, driven by both Helthjem and Morgenlevering. Helthjem has delivered approximately 2.9 million parcels, including deliveries to stores during this quarter, which is an increase of 40% despite strong comparables from last year.
Morgenlevering continued to deliver strong revenue growth with a 41% increase compared to Q3 last year, and this is mainly driven by higher average revenue per unit sold. We see a somewhat lower volume growth following the reopening of the Norwegian society. However, there is still a high demand for online shopping, and we do see a more permanent change in these shopping habits. On the cost side, the move to a new terminal outside of Oslo with higher capacity to accommodate for our future growth has led to increased fixed costs in Helthjem, such as transportation costs and terminal costs. This has led to an increase in unit costs, and this affects EBITDA negatively compared to the previous quarters.
Our last business area is Financial Services and Ventures, and this consists of brands like Lendo and Prisjakt and in addition to other digital services where we either have a minority or a majority ownership. Financial Services and Ventures had a mixed performance across the portfolio in Q3, with total revenues growing 9%, primarily driven by a strong development in Lendo. I will get back to Lendo on the next slide. Looking at Prisjakt, revenues declined 3% compared to last year, driven by lower traffic and click revenues. Prisjakt experienced a strong boost from e-commerce in Q3 2020 as a result of the pandemic and the related restrictions. As this effect has declined throughout the year, the year-on-year development now shows a slight, and I must say, disappointing decrease in revenues compared to last year.
The revenue decline was offset by lower costs, leading to a stable EBITDA compared to last year. Within the other group of the portfolio, it's primarily Mittanbud and Servicefinder that is driving the growth compared to last year with an increased customer portfolio and average spend per customer. Finally, our venture business had high activity in Q3, and I'll also come back to that in a minute. Let's do Lendo first, where underlying revenues ended up 21% above last year in Q3, and that is approximately the same speed as we saw in the second quarter. All markets delivered double-digit growth in Q3, and performance was particularly strong in Norway. Growth is still driven by the demand side of the platform. Overall, the conversion from applications to revenues is significantly lower than pre-COVID.
In Q3, we have seen signs that banks increase their risk appetite in some market, making it easier for us to find good offers for our customers. Margins are lower than the same quarter last year, but remember though that in Q3 2020, we were braking hard on the cost side of the business. This year, Q3 spend on expansion is higher, and we spend more on above-the-line marketing. Looking at 2021 as a whole, we maintain our target on EBITDA investments for the geographical expansion. Finally, let me conclude my presentation with our venture business, an area which has and will continue to be important for Schibsted as our company is built on the combination of entrepreneurship, innovation, and investments. Based on analyzing internal and external trends, we identify the businesses of tomorrow.
We find the best entrepreneurs and intrapreneurs, and we work actively to create synergies between our existing businesses and these new businesses. This way, we create strong products and services, and we manage to create value for all our stakeholders. The most prominent example of this, besides Adevinta, which we spun off, are probably Blocket, Prisjakt, and Lendo. As you can see on this slide, we have built an exciting portfolio over the last years, which we will continue to shape with increased effort now as I presented last quarter when I announced our new organizational structure.
A key factor to succeed with this strategy is also to attract the right people, the right and the best talents, something which we have put at the very top of our agenda. Looking at Q3, Ventures had an eventful quarter, with some highlights being the listing of the learning platform Albert, in addition to a good deal flow, which included new investments in Seed and Tibber. Tibber is an energy company which empowers people by lowering their energy bill and consumption, and the latter is a great fit looking at our mission statement, and we are confident that we can contribute to Tibber's further growth with not only capital, but also with great expertise from scaling our other leading consumer-facing brands. With this, let me hand it over to Ragnar before I will be back for the Q&A. Thank you so far.
Thank you, Kristin, and good morning, everyone. I'm pleased to give you some more details on our strong financials in the third quarter, and let me start by commenting on the consolidated result for the group. With our Q3 results, we continue the strong revenue growth and EBITDA margin development from Q2. Revenues ended at NOK 3.7 billion this quarter, a growth of 11% compared to the same quarter last year, but also 13% higher compared to the third quarter in 2019. It is in particular strong revenue growth within Jobs in Nordic Marketplaces, as described by Kristin, which also then translate into strong growth in the consolidated EBITDA.
In the graph to the right, you can see the EBITDA split per segment, where Nordic Marketplaces increased by NOK 143 million compared to last year, despite some increased costs for marketing and prioritized product development initiatives in the quarter. NOK 121 million of the EBITDA increase in Nordic Marketplaces is driven by Finn alone, and the consolidation of Denmark adds another NOK 26 million to the increase. Also in News Media, we have started to ramp up investments in strategic initiatives to cater for continued future growth. Thanks to the continued strong development in both digital advertising and subscription revenues, the EBITDA margin landed at 13%, which is slightly above our target range of 10%-12%. Within both Distribution & Financial Services and Ventures, we see a somewhat declining EBITDA this quarter compared to the last year.
Decline in Distribution is driven by higher fixed costs to expand capacity to accommodate further growth, while expansion investments and increased marketing in Lendo affect the bottom line in Financial Services and Ventures. All in all, though, Schibsted Group delivered a strong 21% margin in the quarter, and EBITDA grew 13% in absolute numbers compared to last year. When looking closer at our income statement, our operating profit for the quarter ended at NOK 564 million, an increase of NOK 204 million from last year. Operating profit was positively affected by a gain of NOK 100 million related to the sale of Kunnskap, which is included in other income. Other expenses mainly relates to the integration of the acquired operations in Marketplaces Denmark.
The reported tax rate in the third quarter of 19% is somewhat lower than the average nominal tax rates, positively affected by non-taxable gain on the sale of Kunnskap. Please note then that share of result from Adevinta is not included in share of profit of joint ventures and associates in this quarter, as it will be reported with one quarter lag started from Q4 2021. Our operating cash flow was strong in the quarter and increased with 76% compared to the third quarter last year, driven by the increased EBITDA and lower tax payments in the quarter. Capital expenditures were slightly higher than Q3 last year, mainly due to increased investments within product and tech across our segments. The financial gearing is well within our target range, and the undrawn facility secures a strong liquidity buffer going forward.
The consent from our banks for a temporary waiver of our financial covenant still stands until the bridge loan is repaid. Proceeds from a possible sale of Adevinta shares will be used to repay the bridge loan, if not refinanced otherwise. We obtained a public rating of BBB stable from Scope Ratings in August, and the rating reflects Schibsted's solid operating performance and robust financial risk profile that includes moderate leverage and strong liquidity. As usual, I will end my presentation with our financial targets and policies and some comments on the outlook. Our overall financial targets are unchanged from the second quarter. We remain confident in the growth potential of our Nordic Marketplaces businesses and keep our medium- to long-term target to grow annual revenues with 8%-12% in this segment.
In 2021, though, growth is expected to be at the higher end or potentially above this range. This is due to the strong rebound we are observing, especially in Jobs. While we do not comment on margin targets for this segment, we expect, like we have highlighted in, also in the Q2 presentation, that our high growth ambitions and the transformation towards next generation of Marketplaces will require increased investments in product and technology in the short and medium term. On the back of underlying good trends and of a strategy in News Media, we expect an annual low single-digit revenue growth for this segment in the medium term and a medium-term EBITDA margin in the range of 10%-12%.
Also for News Media, with the continued strong development in the advertising market, both revenues and margins in 2021 are expected to end up in the upper end or slightly above our midterm targets. Finally, our capital allocation strategy is for now unchanged. As also mentioned during the Q2 presentation, we will though, going forward, increase our efforts further to shape and execute a holistic investment strategy. This work is headed by Andrew Kvålseth, Chief Investment Officer and new to our group executive management since August. The aim is to identify additional opportunities for investments, potentially broadening Schibsted's portfolio of businesses and brands. This might alter our capital allocation and M&A strategy somewhat going forward, and we will of course come back to this when the strategy has been more substantiated. With that, I hand over to you, Jann-Boje Meinecke, for the Q&A.
We also Christian Printzell Halvorsen, our head of Nordic Marketplaces, will be present in addition to Kristin and myself.
Yes. Back for the Q&A. Let's start with Nordic Marketplaces. In the Job vertical, new approved ads continue to grow in Q3 year-on-year but were slightly below the second quarter in both Norway and Sweden. Is it fair to assume that the quarter-on-quarter growth from Q4 to Q3 will increase again, given the seasonality which we've seen in the past?
Yes. It's usual to see some growth between Q3 and Q4. I think in terms of the growth rate overall, I think we will expect some kind of tapering going forward. Yes.
The revenue growth in the Job vertical in Q3 was driven by both volume, you said, and an improved ARPA. Can you just explain, like, how you've worked on the ARPA development? What has happened in comparison to last year?
Yes. We have actually worked quite actively on this topic, so it's a number of factors that come into play. One thing is a favorable volume mix, so ads that actually have a higher cost. We've also worked with pricing and packaging, both in Norway and in Sweden. We have worked on more efficient self-service tools, and we've also enabled, especially now our sales force in Norway, with the data-driven sales methodologies that enable them to be more effective in upselling products to customers.
Moving on to a different vertical but still Nordic Marketplaces, the Motor vertical. Here you, Kristin mentioned that Denmark underperformed in comparison to last year. We saw actually that Finn had a better development in comparison to last year. What's the difference for the dynamics which we see across the Nordics, and do you think the situation will change short term, or what's your take here?
I think it's important to understand the interdependency between the new car market and the used car market. When a new car is sold, it usually triggers the sale of an old car. There has been supply chain problems in the new car market all over the world, actually. That has created a very tight used car market where there is a shortage of used cars. That in Norway that has maybe been a little bit less significant. We believe that that could possibly be because Norway is, to a large degree, a test market for electric vehicles due to very favorable tax regulations and so on.
While it's not the same case in Denmark, as an example, there has been a very high shortage of used cars in Denmark. Denmark has a business model where you pay per ad per day. When there's a higher turnover in the market, that puts a limit on our revenue.
Yeah, it's important to realize that Norway is the odd case out because of this electric vehicle situation.
Yes.
It explains a lot, the difference, I think.
Yes.
Moving to Real Estate. I think looking at Finn, we saw a decline in the third quarter now. You comment on this is also driven by high interest rates in the market or the market conditions. Can you just explain, like, why this change in interest rates impacting volumes? One could think that a tougher underlying market could lead to actually more activity in the market.
Yes, in general, I would say that is true, that when there is a shortage, you will have more activity and then more ads and so on to get the properties sold. I think in this particular case now, we're coming from a record high activity level and record high volumes, so I think that is dampening that effect a bit.
Maybe then last question for Marketplaces before we move on to the different areas. You consolidated Denmark for the first time now in the third quarter. Have you made any changes now? What were the first actions you've taken in the third quarter for Denmark?
Yes. We have of course started the integration work with the rest of Schibsted. That's work that we have planned for a year while we've been waiting to take over Denmark, so that's progressing really well. We have also started strategy work to really see what can we do to realize the potential in Denmark and set that country on a new growth path. So it's been really exciting, and we've also been starting to look at what could be structural opportunities in Denmark.
We can move on to advertising in News Media. Given like budget restrictions currently, on back of macro softening, but also like the supply chain issues which we see globally, do you have any take on Q4 or how advertising will develop going forward?
Yeah. I mean, we see the strong trend continuing into Q4, and you know, it's driven by video, by content, by premium display as formats, and we also see that we have a strong momentum in you know, the consumer goods section and the efforts that we made, especially in Sweden on that. We expect that momentum to continue for at least the foreseeable future now.
Staying a little bit with, like, with external factors. I mean, currently you can read a lot about, like, tight labor markets in general, competition for tech. Do you think this could impact the business and also lead to higher cost inflation for your personnel costs?
I mean, I think, you know, Gartner listed it as the highest risk for all organizations, and I think that's a good point. We have this really high on our agenda. There is a huge war for talent out there. We do a lot of work to mitigate it. We have established an in-house hiring department, which I would claim is probably one of the most professional hiring units in Scandinavia, actually, and we proactively seek out talent, because the best talent will never apply for a job. You need to know who they are and you need to pick them and make them want to work for you. We work very hard with our employer branding as well and the unique selling propositions.
Of course all of this is not worth much if you don't manage to maintain and grow the people you already have. That is of course another main focus. I think, you know, in all of this, I think we're doing quite well, and I think we have been aware of it for a good time, so we are a bit ahead maybe. It will affect everybody and it will drive up cost, because there will be such a fight for the best talents and that will drive up salaries. I think that might happen, yes.
Let's move on to e-commerce, a topic which you like, Kristin. So you reported lower growth this quarter, and I think also more cautious on the outlook. Do you think we can still stay within double-digit when it comes to growth? Maybe also a second question on costs. You mentioned, like, margin went down because we invested in more capacity with step-up costs.
Yeah.
Was this like a one-off, or should we expect like higher costs going forward as well related to this?
Right. No, first of all, I mean, I think it's a super sound and exciting business, and it's only I mean they have been growing three digits, right? I think it's you know now they're down to strong double digits, and I think that's only normal when the market normalizes more after COVID. You know, when you grow on already higher numbers, you know, constantly having that growth rate is it's you know it's gonna level off somewhat in the rate. On the other hand, they grow from larger numbers, so the absolute growth is stronger. I'm very optimistic about the outlook for this business, and on the cost side, we needed to increase our capacity. It's a result of the strong growth that we're seeing.
Of course, initially, you then have a higher unit cost, but then as volumes grow and you, let's say, utilize that full new capacity, that cost per unit will tick down accordingly. It's a necessary part of running a growth business, that you have these step changes in capacity.
Question for Ragnar. D&A increased now in the third quarter. Can you give like the main reasons why D&A increased in Q3, and do you have also some comments if this should continue going forward?
D&A?
Depreciation and amortization.
The reason why it increased was that the depreciation increased. It's due to acquisition of Oikotie and Denmark, and then also we have decided to sort of move our printing facilities for the newspapers to another location, so we also have accelerated, let's say, the remaining depreciation on the existing facilities somewhat. That is the main explanation for that.
Going back to Nordic Marketplaces one more time. How should we think about Finland going forward, when it comes to the balance regarding investments and synergies, and the development for margins going forward?
Yes, I don't think we will comment on margins specifically for one country, like that, but Finland is still an investment case for us, particularly in real estate. It's an exciting market that we think is underdeveloped, and we are, as Christian was saying, seeing some interesting progress in that area, so yeah.
Looking at the outlook, Ragnar, you said, like, Nordic Marketplaces will invest in new services, so it sounds like margins could decline in the future. Is this more near term, or should also long-term margins be lower than today? If you want to comment on that.
Yeah, like I said, in the near term, there will be some. We will have some added cost from the investments into these new transaction models, so that will potentially influence margins somewhat. Of course, depending a little bit on the mix of the revenues and how that develops. If you look into those new business models around transactional, particularly on the Generalist side, the business model there also potentially includes a significant shipping element. So the net margin for some of these new services will be significantly lower than they have from the traditional listing models. There will be a dilutive effect on margins.
What is important to say that this new transaction model, particularly on Generalist, it's opened up a totally new revenue stream for us because we don't have any significant revenues from Generalist site except from in Sweden as of now. Of course it's important that this will help us grow EBITDA, but hopefully sort of at the upper level of what we have targeted, but not be the same kind of margins that we have seen from the traditional services.
Again, Christian, for you in Nordic Marketplaces, we saw, like, a mixed development when it comes to digital advertising. Finn was actually growing in the third quarter. Blocket was flattish. Do you have a reason for the different development and any color of how this could continue?
Well, it's true that Finn developed very nicely in the quarter. It was driven both by national sales together with the newspapers and also with personal finance actually. In Sweden, it was flatter. I think it could be linked to the car market actually, where we saw a lower volume of investment from that segment. It could have a linkage to what we discussed previously here.
Going back to advertising, the question is if your business is impacted by IDFA. I think that's related to what Facebook and Snap reported this week, that the change from Apple's privacy policy is probably impacting their business. How should we think about Schibsted here?
Yeah. No, we see very little impact from that. It's partly because that whole thing is not so developed here. It's not as sophisticated, and you know, we don't do sales through that IDFA. What is it called again?
IDFA.
Exactly. We don't use that, so it's for now very little impact.
Moving on to something completely different, Rocker, we saw is heading for a listing in Stockholm. Is this, like, an isolated event for the portfolio, or should we think that in general, Schibsted is looking to crystallize the value also in other parts, like for example Lendo or Prisjakt?
Sorry, I missed the first part of your question.
Rocker is currently heading for the
Yeah
listing in Stockholm.
Yeah.
Now the question is it, like, an isolated event just looking at Rocker or a general trend that we look at the portfolio and see if we can crystallize value.
Right, sure.
by listing other parts?
Yeah, sure. Yeah. Sorry. Yeah. Well, you know, we have a case by case approach to that. Some, for example, Podme we took into our own portfolio. Albert we, you know, we listed as an IPO. Others might be subject to sale or to partnering with others, or we might keep them as they are. There is no general answer to the strategy for that. It varies from case to case. I have to say, in many of these, we have co-investors, and it will also depend upon the wishes of our co-investors and the entrepreneurs. It's not only up to us as a minority shareholder to decide that in some cases.
Staying a bit in this area, Lendo, if you can comment a little bit more on the latest expansion. How is this developing in the new markets? I mean, you launched in Spain. You looked into Portugal. If you can give some more comments here.
Yeah. I think it's too early days, basically. It's, you know, in Spain, we, you know, it's Portugal is very early on and. Spain, I think they're, you know, making the progress they want to make, but it's too early to state any numbers or anything like that. We are in a soft launch phase, and I think we need to come back to it. I can assure you that we take with us all the learnings we have from the other markets we have gone into, and we will try to nail it as much as possible for Spain and Portugal.
Going back to News Media, probably a question for you, Ragnar. You mentioned, like, high investments in that space, VGTV, for example, E24, podcasts in general. Does it mean that margins next year in 2022 could be at the lower end of the 10%-12% range margin, or what should we expect?
I think I won't comment exactly sort of where within the range you should expect the margins, but it could vary a little bit from, let's say, quarter to quarter as well. But it is important for us now that we use the momentum that we have within News Media, and also make sure that we do necessary investments sort of into these new opportunities that we have identified, and podcast is a perfect example of that. So you should expect lower margins than you see for the time being, and then it could also be that we, in 2022, will be towards the lower end of the range.
Okay, very good. That was the last question for now. I think we can round up here for today. Of course, like Malin and myself, very happy to take your call if you have more questions. Otherwise, see you next time.
Thank you.
Thank you.