Schibsted ASA (SBSNF) Q4 2024 Earnings Call Highlights: Revenue Growth Amid Advertising Challenges

• Group Revenue: NOK2,103 million, a 12% year-on-year increase.
• EBITDA: NOK337 million, a 3% increase from the previous year.
• Mobility Revenue Growth: 1% on a constant currency basis.
• Real Estate Revenue Growth: 11% increase in the quarter.
• Jobs Revenue (Norway): 4% increase despite an 8% decline in volume.
• Recommerce Revenue Growth: 7% increase in the quarter.
• Advertising Revenue Decline: 28% year-on-year decrease in Mobility and 20% in Recommerce.
• OpEx Excluding COGS: Declined by 1% year-on-year.
• Net Cash: NOK2.5 billion at the end of 2024.
• Net Loss: Minus NOK260 million for the group.
• Cash Flow from Operations: NOK279 million, up NOK42 million from last year.
• CapEx: NOK157 million, down 25% from the previous year.
• Dividend Proposal: NOK2.25 per share for 2024.
• Share Buyback Program: Acquired 4.6 million shares at a cost of NOK1.6 billion.

• Warning! GuruFocus has detected 8 Warning Signs with SBSNF.

Release Date: February 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Schibsted ASA (SBSNF) reported a 12% year-on-year increase in group revenues, reaching NOK2,103 million.
• The company launched a new corporate brand, Vend, marking a significant step in its transformation into a standalone marketplaces company.
• The Mobility segment showed growth across all markets, with Sweden experiencing the strongest uplift due to professional and ARPA growth.
• FINN real estate achieved all-time high traffic for the third consecutive quarter, reflecting a strong market position in Norway.
• Schibsted ASA (SBSNF) plans to distribute NOK500 million in proceeds from asset sales within Adevinta as a special cash dividend, reinforcing its commitment to disciplined capital allocation.

Negative Points

• The company's performance was impacted by weaker advertising revenues, partly due to the separation from Schibsted Media and macroeconomic factors.
• Schibsted ASA (SBSNF) experienced a 28% year-on-year decline in advertising revenues, significantly affecting the Mobility and Recommerce segments.
• The company reported an operating loss of almost minus NOK1.4 billion, primarily due to an impairment loss in its Finnish marketplace operations.
• EBITDA for the Recommerce segment decreased by 13% year-on-year, resulting in a margin of minus 35%.
• The closure of jobs businesses in Finland and Sweden led to immediate revenue losses, with some associated costs taking longer to materialize.

Q & A Highlights

Q: Can you confirm the double-digit ARPA growth for real estate in 2025, and is it expected for both Q1 and the entire year? A: Yes, we aim for double-digit ARPA growth for real estate this year. It may be slightly lower in the first quarter, but overall, double-digit growth is expected for 2025.

Q: Could you elaborate on the advertising revenue trends within mobility and the impact of the split from Schibsted Media? A: Most of the decline in advertising revenue is due to the split from Schibsted Media, which required rebuilding sales teams and relationships. The weaker macro environment also played a smaller role. We expect gradual recovery throughout the year.

Q: How are you managing the risks associated with pushing prices in various units, and how do you monitor for adverse effects? A: We have long-term strategic plans for monetization in Mobility, Real Estate, and Jobs. We engage in dialogue with customers and have strengthened our go-to-market practices, which have led to successful outcomes and positive feedback from customers.

Q: Could you provide more color on the expectations for revenues and EBITDA in 2025, and how you plan to progress towards the midterm targets? A: We are on track to deliver on our medium-term targets. 2025 is a transition year with high intensity in transitioning to a common tech platform and exiting certain positions. We expect gradual improvement in efficiency, but significant financial impacts may not be immediate.

Q: Regarding the Real Estate packages, is there a risk of agents trading down to smaller packages after the price increase? A: We don't see a meaningful risk of agents trading down to smaller packages, as only about 2% choose the small package. We provide optionality to customers but aim to offer the most value in larger packages to encourage their selection.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.