Annual report 2015

Highlights in 2015

In a year of fast development in the media markets, Schibsted continued to develop along the strategic course set out by the Board. Our aim is to build global leadership in Online classifieds and develop world-class digital media houses.

Our online classifieds operations have continued to strengthen their market positions and grow revenues rapidly. This goes both for our key established markets in Europe, but also in earlier stage geographies in Europe and in emerging markets. During the last year, we have experienced the benefits of consolidating online classifieds markets. Schibsted has been among the industry leaders when it comes to consolidation by establishing joint ventures and making acquisitions. This creates better marketplaces and better products for consumers and professionals alike by increasing the number of listings and the liquidity of the sites. At the same time, it makes it possible to significantly reduce investments in each market.

In order to deliver even better products to our users and customers we are implementing a new organizational structure with four geographies and stronger focus on global product and technology. Combining a significant increase in product and technology development with centralization of resources and decision-making will make us more speedy, innovative and competitive. Schibsted’s culture is marked by highly motivated people who are committed to build and create something new, and we will disrupt ourselves if needed. In short, we are putting users first.

Our media houses have improved their reach and grown revenues from digital products, and at the same time adapted the cost base to the market development for print products. Nevertheless, the industry-wide decline in print advertising revenues and softening digital growth has led to pressure on profit margins for the media houses overall.

In 2015, Schibsted established a B-share class in order to provide flexibility to pursue value creative M&A. NOK 2.6 billion in new equity was raised in a private placement in September 2015.

  • The Group achieved operating revenues of NOK 15,117 million, a growth of 1 percent.
  • Gross operating profit (EBITDA) ex. Investment phase was NOK 2,527 million, a growth from 2,444 million in 2014.
  • Reported gross operating profit (EBITDA) was NOK 2,016 million, compared to NOK 1,941 million in 2014.

A global leader in Online classifieds

  • Revenue growth of 19 percent.
  • Gross operating profit (EBITDA) grew 17 percent. The growth was 13 percent ex. Investment phase.
  • Continued traffic growth across the portfolio, primarily driven by strong growth in mobile traffic.
  • Continued high growth rate and strong margins in the French site Leboncoin.fr. Successful transition to stand-alone real estate product in the French market.
  • Accelerated revenue growth in Spain supported by improved markets, product development and integration of Milanuncios.
  • Positive revenue development in Norway and Sweden driven by new services and price optimization.
  • Significant progress when it comes to M&A. The signing of the acquisition of the leading Swedish real estate site Hemnet, the acquisition of Anumex in Mexico and the merger with Distilled Media in Ireland were among the most important transactions.
  • Ownership in the native mobile app Shpock was increased. Marketing investments yielded strong growth in downloads and user engagement in Germany, UK and Austria.
  • Positive effect from establishment of joint ventures with Naspers, Telenor and Singapore Press Holdings in Latin America and Asia. Marketing investments are significantly reduced, and traffic has accelerated.

Building world-class digital media houses

  • Continued rapid structural change in the industry. Print advertising declined 16 percent in Scandinavia. Digital advertising increased 3 percent.
  • Total EBITDA margin for media houses unchanged at 9 percent supported by cost adaptions and digital growth.
  • Continued great editorial success. A range of awards presented to Schibsted’s media outlets, including several categories at The Swedish Grand Prize for Journalism and Newspaper of the Year in both Norway and Sweden.
  • Good development for Aftonbladet and VG, driven by digital growth and increased cover prices on print.
  • Steady growth and margin improvement for personal finance and price comparison services in Sweden and Norway.
  • The free newspapers in Spain and France were divested (closed 7 January 2016), leaving Norway and Sweden as core markets for media houses.

Strengthened focus on technology and product development

  • Significant ramp up of competence within online product and technology development in order to facilitate the digital transformation and the strategy of forming identity-based ecosystems.
  • The first products in a range of innovative improvements were launched within targeted advertising, improved editorial tools, payment services and new market place functionalities.
  • A new matrix organization with new geographies and stronger global functions were established. The new organizational model implies accountability for P&L along a geographical dimension split into Norway, Sweden, Europe Established and Emerging Markets. At the same time, Product and Technology are new global functions across the geographies, and this centralization of resources and decision-making will facilitate scale and speed of development.
  • The new matrix organization enables Schibsted to deliver even better products to our users and customers – and at the same time strengthen our ecosystem strategy. We use the combined force of our popular marketplaces, media houses and growth services to build national ecosystem, and to support this we take advantage of the global scale of the Group to build excellent digital products and technology for our companies. We sum it up to: User first!

The Board proposes allocating a dividend of NOK 1.75 per share for the 2015 financial year.

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