Classifieds contribute 43% of Schibsted revenue

08 Feb 2017

Multi-media company Schibsted grew the share of total revenue contributed by online classifieds to 43 percent in FY2016 from 38 percent in FY2015. The group released its financial results for FY2016 in Norway earlier today.

In total, the group generated operating revenue of NOK 15.8 billion ($1.9 billion U.S.) in FY2016, which was 5 percent higher than the NOK 15.1 billion earned in FY2015.

The group is organized in five operating segments, namely Online classifieds Norway (Finn and Mittanbud), Online classifieds Sweden (Blocket, BytBil, Servicefinder), Online classifieds International (several sites around the world), Media House Norway and Media House Sweden.

Performance of classifieds

The three online classifieds segments (Norway, Sweden and International) together generated operating revenue of NOK 6.8 billion ($816 million U.S.) in FY2016, which was 19 percent more than the NOK 5.7 billion of FY2015.*

However, the operating profit of the three classifieds segments dropped to NOK 1.6 billion in FY2016 from NOK 2.5 billion in FY2015, mainly due to a steep decline in the operating profit of the segment Online classifieds International.

In turn, this negative development pulled down the group operating profit to NOK 1.2 billion in FY2016 from NOK 2.2 billion in FY2015.

Performances of classified segments

The NOK 6.8 billion generated by the three classifieds segments was broken down:

+ Online classifieds Norway earned NOK 1.7 billion in FY2016, which was 9.8 percent up on the NOK 1.5 billion of FY2015;

+ Online classifieds Sweden earned NOK 1.1 billion in FY2016, which was 6.6 percent up on the NOK 987 million of FY2015;

+ Online classifieds International earned NOK 4.1 billion in FY2016, which was 27.6 percent up on the NOK 3.2 billion of FY2015.

EBITDA margins of the three classifieds segments were given as:

+ At Online classifieds Norway the margin dropped to 40 percent in FY2016 from 43 percent in FY2015;

+ At Online classifieds Sweden the margin rose to 52 percent in FY2016 from 51 percent in FY2015;

+ At Online classifieds International the margin rose to 17 percent in FY2016 from 16 percent in FY2015.

Individual site performances

The best site performance came from Leboncoin in France, which grew its operating revenue by 19 percent y-on-y.

“Revenue growth was driven by real estate and cars, and the acquisition of MB Diffusion, the classified site for agricultural and construction equipment based in France,” said Rolv Erik Ryssdal, CEO of Schibsted Media Group.

MB Diffusion was acquired in September, and revenue was consolidated from October.

“The jobs vertical of Leboncoin started monetizing in October 2016. In Q4, the revenue contribution of the jobs vertical was still limited, but growth was promising. Leboncoin continues to improve its monetization in the real estate segment. Real estate revenue grew by 40 percent in Q4 compared to the same period in FY2015. Leboncoin real estate is the market leader in France by the number of listings and traffic,” he said.

“In the car segment, revenue progress is also good, and Leboncoin holds a solid leadership position in terms of number of listings, traffic and number of dealers. Leboncoin grows revenue from cars consistently. In Q4 revenue was 15 percent higher than in Q4 of FY2015,” he said.

“Going forward, the focus will be on monetizing the verticals further and introducing new products for professional customers,” he said.

Revenue growth slowed to 12 percent y-on-y at Schibsted Spain.

“The slowdown was primarily due to reduced momentum for display advertising and some slowdown in jobs, because of macro-economic trends. There has also been increased competition in the real estate market,” Ryssdal said.

Actic Securities, a Norwegian investment bank, said: “(In Spain) we continue to be concerned about Wallapop, which has extended its gap to Schibsted’s sites on mobile since December. Our 2017 estimates for Spain are modest and well below consensus”.

Italy, Austria and Ireland delivered “steady, high growth rates,” Ryssdal said.

“It is good to see that revenue growth is accelerating in Brazil. Our native marketplace app Shpock continues to set new records in terms of downloads and user engagement,” he said.

Shpock operates in Austria, Germany, the U.K., Norway, Sweden and Italy.

The way forward

The company will continue to invest in native apps, such as Shpock, in 2017. In other markets, increased monetization and reduced marketing spend will push net investment spend down in FY2017.

“The positive trend towards profitability in Brazil is expected to continue in 2017, and the Brazilian operation (OLX) is expected to reach profitability in 2017. In total, investment in FY2017 will drop significantly from the €94 million in FY2016,” the company said.

Here is the financial report.

*With revenue of $816 million U.S. in FY2016, Schibsted has its nose ever so slightly in front of the classifieds portfolio of EBay, which generated $791 million U.S. in the same period. We reported EBay’s results here.

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Christo Volschenk

Christo Volschenk is managing editor of the news on Aimgroup.com and our senior analyst covering Naspers. He brings more than 31 years of experience in business journalism to the team - the last 18 years focused on classifieds and e-commerce. Apart from working closely with the AIM Group, Christo is a freelance journalist, content manager, and copy editor. Before branching out on his own, he spent 15 years with Naspers in South Africa as journalist, economics editor and online project manager. He now spends most his day editing the news reported by 23 colleagues in 23 countries from his base in Stuttgart, Germany.