Today, Schibsted released its Q1 2020 results.
Highlights of the quarter
- Group revenues increased by 5 percent in Q1 2020
- Q1 revenues for Schibsted ex Adevinta decreased by 2 percent (4 percent currency adjusted)
- Q1 EBITDA for Schibsted ex Adevinta came in 32 percent lower than last year at NOK 285 million
- Nordic Marketplaces: Revenue growth slowdown particularly affected by COVID-19 from mid-March, leaving Norway revenues flat compared to last year, while revenues in Sweden increased driven by Motor. Underlying flat EBITDA margin in Norway, Sweden with lower margin driven by investments in sales and product and technology capabilities.
- News Media: Exceptional growth in traffic and digital subscription revenues in March, but substantial drop in advertising revenues due to COVID-19 from mid-March and gaming regulation in Sweden led to a significant EBITDA decline year-on-year in Q1. Cost program targeting NOK 500 million cost reductions by 2021.
- Financial Services: Continued growth in Lendo Sweden. Reduced investments in international expansion.
- Growth: Solid revenue growth driven by Distribution. EBITDA decline driven by higher cost level and a decline in revenues for advertising driven services due to COVID-19.
- Adevinta: Revenues increased by 8 percent, EBITDA margin of 23 percent (based on Adevinta’s stand-alone reporting in EUR).
- Given the uncertainties introduced by the COVID-19 pandemic, the Board proposed to cancel the dividend for 2019.
Comments from the CEO
“Taking into consideration the huge impact the COVID-19 pandemic has on everyday life, global economic activity and our businesses, the first quarter of 2020 is satisfactory for the Group. We have initiated a range of measures to adapt to the uncertain situation, and at the same time continued to deliver fully functional services. In this context, I would highlight that our News Media operations have played a tremendously important role during the crisis, providing users with balanced and trustworthy information,” CEO Kristin Skogen Lund says.
“Financially, we have seen a negative impact on revenues during the last weeks of March, and April has developed similarly. For the quarter, our revenues, excluding the contribution from Adevinta, declined by 2 percent. Adjusted for the sharp weakening of the Norwegian krone since mid-February towards other major currencies, revenues declined 4 percent,” CEO Kristin Skogen Lund says.
“Nordic Marketplaces saw a slower revenue growth in Q1. In Norway, the revenue development was flat, driven by a revenue decline in the job and travel verticals due to lower volumes balanced out by revenue growth in advertising and other verticals. In Sweden, our renewed approach to the car market has continued to prove successful and revenues continued to grow in Q1,” CEO Kristin Skogen Lund says.
“News Media has seen traffic records over the last weeks, but experiences a significant drop in advertising revenues, partly compensated by good growth in digital subscriptions. Advertising performance was rather stable in Norway compared to last year, up until mid-March, whereas Sweden was still affected by the regulatory tightening of the gaming industry imposed in early Q2 2019,” CEO Kristin Skogen Lund says.
“Lendo in Sweden delivered another quarter with double-digit revenue growth, whereas Norway and Finland slowed down further. We continue to see good development for Lendo in the Danish market, even though this is at an earlier stage. We have taken the decision to close down the Lendo operation in Poland and to change the operating model and significantly scale down the operations in Austria,” CEO Kristin Skogen Lund says.
“Our Growth portfolio had a mixed development in Q1, with Distribution continuing to perform well, further fuelled by the e-commerce growth during the COVID-19 outbreak, whereas revenues in advertising driven services declined,” CEO Kristin Skogen Lund says.
“The described negative revenue trends led to a significant drop in operating margin in Q1. Going forward, we will continue to implement measures to ensure adequate operational and financial robustness during a period of significant turmoil and uncertainty. The most important initiative is a cost program for News Media to accelerate the transition to a future oriented, digital sustainable news organization. This is implemented to safeguard the News Media operations’ long-term financial health and high relevance in society. Building on the measures which we announced at the Q4 2019 presentation, the total program includes cost reductions of around NOK 500 million. Implementation has started with first effects occurring during the second half of 2020. Full effect will be in place in 2021,” CEO Kristin Skogen Lund says.
“In April, Schibsted refinanced a NOK 1 billion bond loan maturing later this year, and we are presently in a solid financial position. This means that we are well prepared to navigate in the current rough waters, and at the same time preserve capacity to act on opportunities that might occur,” CEO Kristin Skogen Lund says.
|Schibsted excluding Adevinta|
|– of which digital||1,826||1,813||1%|
|Schibsted Group including Adevinta|
Alternative performance measures used in this release are described and presented in the section Definitions and reconciliations in the quarterly report.
As a result of the COVID-19 pandemic, our Q1 2020 presentation will be held as an English language webcast only on 06 May 2020 at 09:00 CET. Consequently, it will not be possible to attend the presentation in person. Participants can send in written questions through the webcast player.
The presentation will be webcasted live at: Schibsted ASA Webcast Q1 2020
You may also follow the presentation on YouTube: Schibsted ASA YouTube Q1 2020
CEO Kristin Skogen Lund and EVP CFO Ragnar Kårhus will present.
A recording of the event will be available on the IR website shortly after the live webcast has ended.
Conference call for investors and analysts – Q&A session
Time: 06 May 2020 at 14:00 CET
Questions relating to the results will be answered in a conference call. The session will be held in English.
NOTE: To avoid waiting time when connecting to the call, please use the link below 5-10 minutes prior to start time, where you will be asked to type in your phone number and registration details. The event conferencing system will automatically call you back on the phone number you provide and place you into the event. Please note that the link will become active 15 minutes prior to the event: Link to join call: Click to join
For manual dial-in, use the following number (note that this connection might take more time):
Norway: +47 2350 0187
Sweden: +46 (0)8 5033 6546
UK: +44 (0)330 336 9401
US: +1 323-794-2095
Passcode: 76 20 73
A recording of the conference call will be made available at schibsted.com/ir/.
Ragnar Kårhus, CFO, +47 917 91 752
Jann-Boje Meinecke, Head of IR, +47 941 00 835
Atle Lessum, Head of Schibsted Group Communications, +47 415 05 645
Oslo, 06 May 2020
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act