Online classifieds

SEB Enskilda
Nordic Seminar
Trond Berger, CFO
Copenhagen, 10 January 2012
1
Traditional history
– successful transition to online
2
Operational approach over many years
has generated a strong online footprint
Digital/online share of revenues 2010
Schibsted
Axel Springer
Sanoma
Europe
Mecom
Trinity Mirror
Johnston Press
INM
NY Times
Gannett
USA
E.W. Scripps
The Washington Post
0%
5%
10 %
15 %
20 %
25 %
30 %
35 %
Source: UBS/Company filings
3
Revenue and EBITDA split
as of Q3 2011
Revenues
EBITDA
NOK and percent
NOK and percent
Online
share 36
percent
Media
Houses
online
11 %
Online
classifieds
25 %
Media
Houses
other
7%
Online
share 56
percent*
NOK
10,634
million
Media
Houses
single copy
19 %
Media
Houses
offline
advertising
28 %
Online
Classifieds
48 %
Media
houses
online
8%
NOK
531
million
Media
Houses
offline
44 %
Media
Houses
subscription
12 %
*) Share of EBITDA excluding HQ
4
Two strategic pillars
 Leading positions in print and
online media in Norway, Sweden
and international
 European leader in fast growing
online classifieds
5
Agenda
 Online classifieds
 Media Houses
 Financials & summary
6
Online classifieds
Established European footprint
combined with growth opportunities
Highly profitable #1 positions
BRANDS
CATEGORIES
FINANCIALS Q3’11
ALL VERTICALS
Revenues: 278
Margin: 50%
CARS + GENERAL
Revenues: 143
Margin: 60%
Italy and Austria
break even
CARS + GENERAL
JOBS, GENERAL,
REAL ESTATE,
CARS
Revenues: 315
Margin: 50%
CARS + GENERAL
NOTE: Revenue figures in MNOK
Operations in Established phase
Operations in Investment phase
7
Online classifieds
Good growth and high margins for
Estblished operations
Norway
Sweden
400
100 %
400
350
100 %
400
350
300
75 %
75 %
300
50 %
150
63 %
200
60 %
50 %
150
100
25 %
50
0%
Q3 10
Q3 11
Revenues
EBITDA margin
71 %
62 %
200
50 %
150
100
25 %
50
0
75 %
250
MNOK
50 %
50 %
MNOK
250
200
100 %
350
300
250
MNOK
France
100
25 %
50
0
0%
Q3 10
Q3 11
Revenues
EBITDA margin
0
0%
Q3 10
Q3 11
Revenues
EBITDA margin
8
Good prospects for continued
growth for Established business
Further growth will come from
several sources:
Price optimization
Building new verticals
Product development
9
Blocket.se recently launched real
estate and job verticals
10
Leboncoin.fr launched new product
for car dealers
11
Finn.no launched market place for
professional services
12
Continued expansion of the Blocket
concept in new markets
 Good development in
several European
markets
 Profitable in Italy and
Austria as of Q1
2012
 Good growth in
traffic and number of
ads for younger sites
13
Online classifieds
5 years
Profitability
Return
3 years
Balancing growth and value
Time
Investment
Pipeline of sites moving
from Start-up to Traction
and Established phase
Start-up
Traction
Operations in investment phase
Established
Operations in established phase
14
Sites in Start up phase
growing well (1)
Hungary
Finland
350
180
160
300
140
Million PV/Month
200
150
120
100
80
60
100
40
50
20
0
Jofogas.hu
Aprod.hu
Expressz.hu
Tori.fi
Huuto.net
Olx.hu
Slando.hu
Vatera.hu
Keltainenporssi.fi
Oikotie.fi
okt.11
aug.11
jun.11
apr.11
feb.11
des.10
okt.10
aug.10
jun.10
apr.10
feb.10
des.09
okt.09
nov.11
sep.11
jul.11
mai.11
mar.11
jan.11
nov.10
sep.10
jul.10
mai.10
mar.10
jan.10
nov.09
0
sep.09
Million PV/Month
250
Source: Google Doubleclick AdPlanner
15
Sites in Start up phase
growing well (2)
Portugal
Romania (acquired in 2010)
120
140
120
100
100
Million PV/Month
60
80
60
40
40
20
20
Custojusto.pt
Coisas.com
Miau.pt
Olx.pt
nov.11
sep.11
jul.11
mai.11
jan.11
mar.11
nov.10
jul.10
sep.10
mai.10
jan.10
mar.10
nov.09
sep.09
jul.09
mai.09
0
mar.09
Million PV/Month
80
0
jul.11
aug.11
sep.11
okt.11
Tocmai.ro
Anuntul.ro
Autovit.ro
Mercador.ro
Okazii.ro
Olx.ro
nov.11
Source: Google Doubleclick AdPlanner
16
Online classifieds
3-5 years target
#1 in global Online Classifieds
 Target to be reached through
various measures
 Continued growth through
increased traffic, optimized
pricing, and brand extensions
for the established operations
 Targeted M&A – both as a
way of entering new markets
and as bolt-on acquisitions to
existing sites
 Organic growth through
green field investments in
new markets
17
Online classifieds
Already among the world leaders in
page views
 With 11.2 bn monthly
25 000
Million page views/month
page views Schibsted
is one of the global
leading online
classifieds players
30 000
20 000
15 000
10 000
5 000
Source: Google DoubleClick AdPlanner, Sept 2011.*eBay classifieds: Marktplatz.nl,
Mobile.de, Kijiji.ca, Baixing.com ,Bilbasen.dk, kleinanzeigen.ebay.de, annunci.ebay.it,
anuncios.ebay.es, annonces.ebay.fr, ebayclassifieds.com, Gumtree (uk, au, hk, ie, nz,
pl, za), Kijiji (be, it, jp, ch, tw), Intoko.tr, Loquo.com, Automobile.fr, Automobile.it,
Mobile.eu, Mobile.ro, Automotive sections of eBay (.de, .co.uk, .it, .fr, be, nl, at, ch, pl.
es, ie, se and US .com) Rent.com, DBA.dk, Alamaula (ar, co, mx, cr, br, cl, do, ec, pa,
pe, pt, uy, ve) Quickr.com, Tradera.com, Auction.co.kr, Gittigidyor.com, Ruten.com.tw.
0
Ebay
Classifieds
Schibsted Craigslist.org
18
Online classifieds
Online classifieds: The winner takes it all
EBITDA margin
100%
Players that are much larger than #2
reap higher margins
50–70%
30–50%
5–30%
Sources:
EBITDA margin 2010:
Company reports and
presentations
0%
1x
3—5x
Size versus second player
8—10x
Size vs #2:
Pageviews(AdPlanner),
active objects where
applicable, company
presentations.
19
Agenda
 Online classifieds
 Media Houses
 Financials & summary
20
Media Houses Scandinavia
Tabloids/
Single copy
Subscription
based
Two newspaper business models
Online
share of
revenues
Market
position
Circulation
volume
1
414,224
5%
2
185,100
4%
1
215,531
18%
1
235,500*
19%
Circulation
trend
NOTE: Figures as of Q3 2011. Aftonbladet circulation is September 2011 figures
21
Media Houses Scandinavia
Subscription based newspapers
Stable revenue and good margins
MNOK
Aftenposten
Bergens
Tidende
Stavanger
Aftenblad
Fædrelandsvennen
Svenska
Dagbladet
500
50 %
400
40 %
300
30 %
200
14 %
100
8%
10 %
20 %
15 %
12 %
11 %
10 %
6%
10 %
5%
2%
0
0%
Q3 10 Q3 11
Q3 10 Q3 11
Revenue
Q3 10 Q3 11
Q3 10 Q3 11
Q3 10 Q3 11
EBITDA-margin (right hand scale)
EBITDA figures excluding associated companies.
Printing activities were carved out of the Media Houses as of Q1 2011. 2010 figures are calculated for comparison purpose.
22
Media Houses Scandinavia
Single Copy sold newspapers
Print declining, continued growth Online
Online Newspapers
500
50 %
100
50 %
400
40 %
80
40 %
300
30 %
60
21 % 20 %
200
18 %
20 %
16 %
11 %
40
10 %
0
0%
Q309 Q310 Q311
30 %
24 %
24 %
18 % 19 %
17 %
13 %
13 %
100
Q309 Q310 Q311
MNOK
MNOK
Print newspapers
20 %
20
10 %
0
0%
Q309 Q310 Q311
Q309 Q310 Q311
Revenue
Revenue
EBITDA-margin (right
hand scale)
EBITDA-margin (right hand
scale)
23
Media Houses Scandinavia
Potential to continue to increase
cover price and subscription rates
 Cover price increases for tabloids
 VG increased cover price on
weekdays from 12 to 13 and
Sundays from 15 to 20 as of
1 January 2012
CAGR +7%
13
12
12
2010
2011
11
10
 Aftonbladet increased cover
price from SEK 11 to 12 in
May 2011
 Subscription price increases for
Media Norge and SvD
 4-6% annual price increase for
Media Norge since 2008
 Further potential for price
2008
2009
2012
VG Cover price Weekdays (NOK)
increases in the future
24
Building new growth engines
Building new growth engines
 Controlling sites with
large traffic volumes
creates immense
launch power for new
online market places
 Sweden: 41% of top 25
 Norway: 30% of top 25
Source: TNS Gallup and KIA Index week 44/11
Sweden
Site
1 Aftonbladet
2
3
4
5
MSN.se
Hotmail
blocket.se
hitta.se
Million
Unique
visitors
5,7
4,6
4,2
3,6
3,3
6 Expressen
7 Eniro.se
8 Aftonbladet WebbTV
2,8
2,4
1,7
9 svt.se
10 DN.se
11 mobil.aftonbladet.se
1,5
1,5
1,3
12
13
14
15
16
svtplay.se
hemnet.se
Tradera
svd.se
tv.nu
1,3
1,2
1,1
1,1
1,0
17
18
19
20
di.se
SR.se
Tv4.se
e24.se
1,0
0,9
0,9
0,7
21 devote.se
22 SF Bio
0,7
0,6
23 familjeliv.se
24 Expressen Sport
25 SL
0,6
0,6
0,6
Norway
1
2
Site
VG Nett
Finn.no
Million
Unique
visitors
4,0
2,6
3
4
5
6
7
8
9
10
Dagbladet.no
NRK.no
MSN
Startsiden
TV2
SOL
Gule Sider
Aftenposten.no
2,5
2,5
2,2
2,1
1,4
1,4
1,3
1,3
11
12
13
14
15
16
17
18
Nettavisen
Blogg.no
Kjendis.no
Kvasir
Klikk.no
ABCnyheter
Opplysningen 1881
E24.no
1,3
1,2
1,0
1,0
0,9
0,9
0,8
0,7
19 DinSide.no
20 Bergens Tidende
0,6
0,5
21 NAV
22 Dn.no
23 minMote.no
0,5
0,5
0,5
24 Adressa.no
25 Seher.no
0,5
0,4
25
Building new growth engines
 Combining the forces of Media Houses and Online Classifieds
enables us to build the online winners of tomorrow
Examples from the past
2003Blocket built up by
Aftonbladet
2005Hitta built up by
Aftonbladet and Blocket
2010-2011Lendo built up by
Aftonbladet, Blocket, Hitta
and traffic fund
Examples of ambitions and opportunities coming 3-5 years
Personal finance in
Norway and Sweden
Price comparison and
e-commerce
Payment systems
Possible launch of the
best Scandinavian
concepts in
international markets
26
Building new growth engines
Our Online Traffic Fund Model
An incentivised model to turn TRAFFIC into VALUE
27
Building new growth engines
Personal finance portals launched
in both Norway and Sweden
Penger.no built up Traffic Fund Norway
Lendo.se built up by Traffic Fund Sweden
28
Agenda
 Online classifieds
 Media Houses
 Financials & summary
29
Transition to online creates a less
cyclical revenue composition
 Print advertising reduced in relative importance
 Online display advertising growing structurally
 Online classifieds …
 … growing structurally
 … is less cyclical by nature as large part of
revenues are C2C buying and selling of used
goods incl. cars
30
Migration towards online
could accelerate in 2012
10 %
Expected growth in advertising revenues 2012
8%
6%
4%
2%
Sweden
Norway
0%
-2 %
-4 %
-6 %
Online
Daily print
newspapers
Total advertising
market
Source: IRM prognosis published December 2011
31
Underlying change in revenues Y/Y
Online classifieds robust during
2008-2009 financial turmoil
Continuous double digit revenue growth despite weak
recruitment market in Spain
60 %
50 %
40 %
30 %
20 %
10 %
0%
-10 %
-20 %
Q1
Q2
Q3
Q4
Q1
2008
Online classifieds total
Q2
Q3
Q4
2009
SCM Spain
Q1
Q2
Q3
Q4
Q1
2010
Finn.no
Q2
Q3
2011
Blocket.se
32
Building new growth engines
Financial snapshot vs. 9M 2008
Better prepared for softer markets
Cash Flow
Net IB debt
2000
6000
1500
4500
2,3
1000
3000
1,5
500
1500
0,8
0
0,0
0
9M 08
9M 11
Cash Flow from Operating Activities
9M 08
9M 11
Net IB debt
NIBD/EBITDA (r.h.)
Bank definition
33
Building new growth engines
How do we respond to a potential
market slowdown?
 We reduce cost
 Reducing annual cost base in Scandinavian Media Houses
by NOK 190-210 million
 We maintain financial flexibility
 Focus on capital discipline
 Buying back shares, maintaining dividend capacity
 We build new growth engines:
 Increasing organic growth investments in Online Classifieds
 Increasing the scope of business for new Online
Marketplaces in Schibsted Tillväxtmedier in Sweden and
Schibsted Vekst in Norway
34
Management focus:
Online growth and strong cash flow
 Online Classifieds:
 Continued investments in green field operations
 Bolt on acquisitions
 Pipeline of New ventures moving towards market leadership
and profitablility
 Newspapers:
 Product development in newspapers
 Further strengthening of number 1 digital positions
 Cost adaption to structural changes in user patterns
 New growth areas:
 Continued development of new digital marketplaces in both
Norway and Sweden
35
Save the date!
Welcome to
London, Tuesday 28 February 2012
More info to come on: http://www.schibsted.no/Investorday2012
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