The global economic situation continues to cause significant uncertainty around the future development of the advertising markets in general. Traditional advertising markets will most probably be affected if the current instability continues. Development varies from one category to another.
Online advertisements will probably have an increased market share of the advertising market in total. Schibsted’s operations are perfectly positioned to benefit from such a development. A good rate of growth is expected for Online Classifieds. This type of business is less affected by economic cycles than traditional advertisement-based revenue models.
Continuing negative trends in the circulation of single-copy papers are considered probable as a result of the migration to digital platforms. For subscription newspapers, the trend in circulation is expected to be slightly declining. Investments are being made in product development and cost-efficiency initiatives in order to counteract this trend. Increased subscription and single-sale prices will make a positive contribution for Schibsted in 2012.
The Group expects to see good growth in traffic for online classified operations in a number of markets, and this business segment is expected to continue to develop and report good growth with high margins.
The Group is continuing to make targeted investments in online growth positions. The rolling-out of the project for Blocket concepts in new markets has given positive results. The growth initiatives in Italy (Subito.it) and Austria (Willhaben.at) will make a positive contribution to profitability for the group in 2012.
The rolling-out online classifieds in new markets is expected to continue at a high pace in 2012. Total investment, which is charged to EBITDA, may be at the same or a slightly higher level in 2012 compared to 2011.
The work to strengthen and further develop number one positions for print and online newspapers and online services will continue. The Group is continuing to work on developing user-payment products and systems for online newspapers. Investment in consumer-related online services will continue, and the interaction between online classifieds and the media houses will be strengthened as part of the growth strategy. Continued strong growth of mobile is expected.
Schibsted remains focused on costs and measures to increase profitability. Continuous improvement projects are being carried out in a number of operations in order to improve efficiency. Cost reductions with an effect of NOK 190-210 million have been decided for the newspaper businesses in Scandinavia. The impact of these reductions will be gradual during the period from 2012 to 2014, with the majority occurring in 2012.
Schibsted Norge will be established and will include VG, Schibsted Forlag and operations that are currently carried out by Media Norge. The main aim is to join forces in order to further develop digital media, strengthen the position in the advertising market and ensure more efficient operations and a simpler organisational structure.