Annual Report • Feb 8, 2018
Annual Report
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JANUARY-DECEMBER 2017
| Schibsted Media Group - Highlights 3 |
|
|---|---|
| Operational development4 | |
| Group overview7 | |
| Outlook | 8 |
| Condensed consolidated financial statements9 |
|
| Definitions and reconciliations | 14 |
| Financial key figures |
17 |
ROLV ERIK RYSSDAL CEO
Q4 concluded a strong 2017 for Schibsted, with profit improvement throughout the whole year. In Q4 alone, the EBITDA growth was 39 percent. The positive development is a result of great efforts in both Online classifieds, Publishing and Schibsted Growth.
In the fourth quarter Schibsted's online classifieds operations continue to develop according to our ambitious plan, delivering 20 percent currency adjusted revenue growth and improved EBITDA margin. Our established operations were progressing well, and our investment phase companies have reduced their losses according to plan. Going forward, we aim to continue to grow revenue and profit by leveraging our leading local market positions to improve monetization in the verticals as well as reducing losses in investment phase operations. At the same time, we will benefit from our joint scalable products and technology.
Our publishing operations delivered good results once again. The growth in digital subscribers continued, and our product focus within digital advertising is bearing fruit, leading to a solid digital revenue growth within publishing. We are developing our publishing operations towards long term viable digital businesses, and we need to further strengthen the two revenue sources and at the same time adapt the cost base. The very foundation of this is our high quality independent journalism.
In both divisions, we are working to roll new digital products out in the market. For example, in Q4, improved tools for professionals were rolled out in the classifieds verticals, and within Media, the feedback to our new news apps has been good.
Schibsted Growth has continued its positive development, particularly driven by the personal finance segment. Lendo experienced a strong end of the year, with revenue growth of 41 percent in Sweden, and the EBITDA margin exceeded 50 percent.
*) Online classifieds pro forma numbers include proportional consolidation of joint ventures and associates
Schibsted Media Group operates online classifieds sites in 20 markets. Operations in Norway, Sweden, France, Spain, Italy, Austria, Ireland, Colombia and Hungary are in Developed phase, whereas online classifieds sites in Investment phase operate in several other countries.
The figures presented are pro forma figures, using proportional consolidation of joint ventures and associates. For IFRS figures, please see Note 3 (Operating segment disclosures). An overview of definitions and reconciliations is provided at the end of the report.
| Fourth quarter | Online Classifieds Revenues | Full year | |
|---|---|---|---|
| 2016 | 2017 Pro-forma (MEUR) | 2017 | 2016 |
| 58,2 | 69,6 France | 257,4 214,0 | |
| 28,7 | 36,6 Spain | 137,7 110,7 | |
| 43,2 | 48,5 Norway | 201,2 170,9 | |
| 25,9 | 25,8 Sweden | 109,0 110,0 | |
| 22,3 | 22,8 Other | 89,3 | 82,9 |
| 178,3 203,2 Total Developed phase | 794,6 688,5 | ||
| 13,8 | 23,0 Investment phase | 76,7 | 44,7 |
| 192,1 226,2 Total revenues | 871,3 733,2 |
| Fourth quarter | Online Classifieds EBITDA | Full year | |||
|---|---|---|---|---|---|
| 2016 | 2017 Pro-forma (MEUR) | 2017 | 2016 | ||
| 35,0 | 38,1 France | 152,5 129,2 | |||
| 4,7 | 11,0 Spain | 34,4 | 23,7 | ||
| 15,6 | 17,8 Norway | 82,3 | 72,1 | ||
| 13,5 | 13,3 Sweden | 58,2 | 62,1 | ||
| 1,9 | 4,3 Other | 11,7 | 5,7 | ||
| 70,7 | 84,6 EBITDA Developed phase | 339,3 292,8 | |||
| (22,9) (16,3) Investment phase | (79,6) (93,6) | ||||
| 47,8 | 68,2 EBITDA | 259,6 199,2 | |||
| 40 % | 42 % EBITDA margin Dev. phase | 43 % | 43 % |
Pro forma operating revenue growth was 18 percent in EUR terms and 20 percent on a currency neutral basis in Q4 2017.
The EBITDA margin for Developed phase operations increased to 42 percent from 40 percent Q4 last year.
Investment phase revenues growth was 66 percent, year over year in Q4. The negative EBITDA of Investment phase operations was EUR 16.3 million in Q4 2017, compared to EUR 22.9 million in Q4 2016. The investment phase losses decreased from last year in all assets. The divestment of certain assets also contributes to the decreased investment level.
Online Classifieds International comprises all online classifieds operations outside Scandinavia. The segment had consolidated revenues of NOK 1,376 million in Q4, up 29 percent from NOK 1,067 million in Q4 2016. The revenue increase is broad-based, and all sites are growing. Consolidated EBITDA is NOK 349 million in Q4 2017 compared to NOK 189 million in Q4 2016. The EBITDAmargin in Q4 2017 was 25 percent, up from 18 percent in Q4 2016.
Operating revenues in France grew by 20 percent in Q4. The revenue growth was driven by positive results from monetization efforts in jobs, continued growth in real estate and M&A. Still soft growth in display advertising revenues.
The EBITDA margin for Leboncoin was 55 percent (60%). Margin decline was driven by a higher level of marketing spend in Q4 2017 compared to last year.
The acquisition of real estate site avendrealouer.fr was completed by 1 December 2017.
Operating revenues in Spain increased by 27 percent in Q4 to EUR 36.6 million. Jobs, cars and the acquisition of Habitaclia led to improvement from last year.
We still see strong competition in the real estate market and a slowdown in display advertising.
The EBITDA margin was 30 percent in Q4, up from 16 percent in Q4 last year.
The growth of operating revenues in Other Developed operations was 2 percent in Q4 2017. The growth was affected negatively by non-organic effects, mainly divestment of Mudah (Malaysia). Adjusted for this, the growth rate was 12 percent.
EBITDA in Q4 was EUR 4.3 million (1.9 million). EBITDAmargin for Other Developed operations in total was 19 percent in Q4 (9%).
In Q4 the growth rates continued at a stable, high level in Italy, Hungary and Austria, partly driven by increased monetization in professional verticals. In Ireland, the growth rate was lower.
The Investment phase portfolio continued to develop strongly in Q4 both in terms of revenue and traffic growth. The revenue growth was 66 percent compared to Q4 2016.
The pro-forma EBITDA of operations in Investment phase amounted to EUR -16.3 million (-22.9 million). The negative EBITDA from Shpock was EUR -11.5 million in Q4 (-12.9 million). The negative EBITDA from Joint Ventures and Associates continued to go down year over year as revenue growth is accelerating and several sites see reduced need for growth in marketing spending.
The investment level (EBITDA loss) in OLX.com.br in Brazil is materially reduced compared to Q4 2016. This is due to both reduced marketing spending and continued strong revenue growth. The revenue growth is mainly driven by professional revenues in classifieds, due to monetization efforts launched last year, with listing fees for car dealers and real estate agents.
Schibsted sees good potential for value creation in the Mexican market, and investments remained high. Segundamano.mx is focusing on consolidating the leading market position in key states, showing strong traffic numbers.
Schibsted is at the forefront of the development of mobileonly marketplaces with the native app Shpock. Shpock expands the market and attracts new user groups and items. It is among the most downloaded apps in the shopping category in large markets like Germany and the UK, and is experiencing strong growth in ad listings and number of active sellers in these markets. In Q4, Shpock continued with marketing campaigns in several markets.
ONLINE CLASSIFIEDS SWEDEN
Sweden's operating revenues were SEK 252 million in Q4, flat development from last year. The slower growth was in part due to a decline in revenues for Servicefinder, a marketplace for services. The revenue growth excluding Servicefinder was 4 percent in Q4.
The main drivers of growth were cars and jobs while display advertising is more challenging.
EBITDA was SEK 131 million (131 million) in Developed phase, implying an EBITDA margin of 52 percent (52%).
Norway showed a strong revenue growth of 18 percent in Q4. Revenues grew in all classified verticals, especially real estate and jobs. Personal finance continued to show strong growth. MittAnbud, which is a marketplace for services, also had good growth in the quarter. Display advertising sales were still soft.
EBITDA was NOK 170 million (141 million) in Developed phase in Q4, implying an EBITDA margin of 37 percent, slightly up from last year.
2017 was a good year for Media house Norway. Revenues where flat compared to 2016 and margin improved to 10 percent (8%) in 2017. In Q4, Media house Norway had all time high online revenues, with a growth from last year of 15 percent.
| Fourth quarter | Full year | |||||
|---|---|---|---|---|---|---|
| 2016 | 2017 Verdens Gang (MNOK) | 2017 | 2016 | |||
| 449 | 447 Operating revenues | 1,746 | 1,700 | |||
| 251 | 207 | of which offline | 882 | 1,017 | ||
| 198 | 240 | of which online | 863 | 683 | ||
| 85 | 76 EBITDA | 339 | 272 | |||
| 19 % | 17 % EBITDA margin | 19 % | 16 % |
VG showed a flat revenue development in Q4 compared to Q4 last year. Online revenues continued to improve in Q4 2017, with a growth of 21 percent. This is the first quarter in VG's history where online revenues are higher than offline revenues.
For full year 2017, VG showed a revenue growth of 3 percent compared to 2016.
The number of subscribers to the premium digital subscription product VG+ was growing steady, and total subscriptions passed 142,000 in Q4.
The EBITDA margin was 17 percent (19%) in Q4 and 19 percent (16%) for full year 2017.
| Fourth quarter | Subscription | Full year | ||
|---|---|---|---|---|
| 2016 | 2017 newspapers (MNOK) | 2017 | 2016 | |
| 746 | 648 Operating revenues | 2,522 | 2,848 | |
| 568 | 478 | of which offline | 1,890 | 2,233 |
| 178 | 170 | of which online | 631 | 615 |
| 71 | 40 EBITDA | 185 | 161 | |
| 10 % | 6 % EBITDA margin | 7 % | 6 % |
Operating revenues declined by 13 percent in Q4 compared to a very strong Q4 last year. The trend in print revenues continued in Q4 with a decline of 16 percent. Online revenues showed a good development in the quarter, but declined slightly from a very strong quarter last year.
Total subscription revenues increased 3 percent in Q4 compared to the same quarter last year, driven by growth in digital subscriptions.
The EBITDA margin was 6 percent (10%). Total operating expenses were reduced by 10 percent as a result of continuous work on adapting the cost base to the markets.
Revenues grew 2 percent in SEK terms in Q4 compared to the same period last year (excl. Hitta). Total EBITDA increased 30 percent in Q4 compared to last year (excluding Hitta).
| Fourth quarter | Full year | |||
|---|---|---|---|---|
| 2016 | 2017 Aftonbladet (MSEK) | 2017 | 2016 | |
| 505 | 486 Operating revenues | 1,861 | 1,933 | |
| 248 | 226 | of which offline | 959 | 1,045 |
| 257 | 260 | of which online | 902 | 888 |
| 66 | 91 EBITDA | 255 | 236 | |
| 13 % | 19 % EBITDA margin | 14 % | 12 % |
Operating revenues were down 4 percent compared to Q4 2016. Online revenues had a growth of 1 percent, while print revenues were down 9 percent in the quarter.
Print circulation volume on weekdays continued to decline rapidly per Q4.
Operating expenses were 10 percent down compared to Q4 2016. The EBITDA margin was 19 percent (13%).
| Fourth quarter | Full year | |||
|---|---|---|---|---|
| 2016 | 2017 SvD (MSEK) | 2017 | 2016 | |
| 260 | 245 Operating revenues | 915 | 951 | |
| 23 | 29 EBITDA | 78 | 74 | |
| 9 % | 12 % EBITDA margin | 9 % | 8 % |
Operating revenues declined 6 percent in Q4 compared to the same period in 2016.
Print revenues decreased 5 percent in Q4, while digital revenues declined 9 percent compared to Q4 last year.
SvD's EBITDA in Q4 was SEK 29 million, a 25 percent improvement from last year due to cost reductions. Operating expenses were down 9 percent in the quarter.
Schibsted Growth consists of a portfolio of web-based growth companies. These companies benefit from the strong traffic positions and brands of Schibsted's established operations in Sweden. Figures below are excluding Hitta.se (divested end of July 2017).
| Fourth quarter | Schibsted Growth ex. Hitta | Full year | ||
|---|---|---|---|---|
| 2016 | 2017 (MSEK) | 2017 | 2016 | |
| 254 | 320 Operating revenues | 1,147 | 893 | |
| 57 | 85 EBITDA | 295 | 210 | |
| 22 % | 26 % EBITDA margin | 26 % | 24 % |
Total revenue growth was 26 percent in Q4 2017.
EBITDA margin of 26 percent (22%), and total EBITDA was up SEK 28 million to SEK 85 million in Q4.
| Fourth quarter | Lendo Sweden | Full year | |||
|---|---|---|---|---|---|
| 2016 | 2017 (MSEK) | 2017 | 2016 | ||
| 92 | 130 Operating revenues | 485 | 340 | ||
| 48 | 68 EBITDA | 240 | 154 | ||
| 53 % | 53 % EBITDA margin | 50 % | 45 % |
The personal finance services, particularly Lendo, is an important driver of the revenues and EBITDA growth. The growth rate of Lendo.se was 41 percent compared to Q4 2016.
Group consolidated revenues increased 10 percent in Q4. Total consolidated online classifieds revenues (Norway, Sweden and International) grew by 23 percent in Q4 in NOK terms. Media House Norway revenues decreased by 1 percent in Q4. Media House Sweden revenues increased 1 percent in Q4 in NOK terms (flat development in SEK excluding Hitta). Consolidated operating expenses increased by 6 percent in Q4.
Share of profit (loss) of joint ventures and associates was NOK -29 million (-45 million). Other income and expenses are disclosed in note 4 to the Condensed financial statements.
Operating profit in Q4 2017 amounted to NOK 479 million (295 million). Please also refer to notes to the Condensed consolidated financial statements.
Net financial items are disclosed in note 5 to the Condensed financial statements.
The underlying effective tax rate was stable around 30 percent. The reported tax rate is 30 percent for 2017, compared to 56 percent for 2016. Generally, Schibsted reports a high effective tax rate which is primarily related to losses for which no deferred tax benefit is recognized. The effective tax rate in 2017 was lowered significantly by nontaxable gains. Reduced net investment spend through increased monetization and reduced marketing spend may reduce future effective tax rates.
Basic earnings per share is NOK 0.85 compared to NOK 0.36 in Q4 2016. Adjusted earnings per share is NOK 0.88 compared to NOK 0.44 in Q4 2016
The currency adjusted revenue growth rate for the Group was 6 percent in Q4.
Total revenue growth for all three online classifieds segments combined, adjusted for currency effects and Joint Ventures and Associates was 20 percent in Q4.
Revenues for both media house segments combined, adjusted for currency effects decreased 2 percent compared to the same period in 2016.
Adjusted for currency, Group operating expenses grew 2 percent in Q4.
Consolidated EBITDA ex. Investment phase was NOK 845 million (681 million) in Q4 2017.
Group EBITDA margin ex. Investment phase was 20 percent (17%) in Q4.
On 16 January 2017, Schibsted Spain announced the acquisition of the real estate portal Habitaclia.com. With this movement, Schibsted Spain, owner of the Spanish real estate site Fotocasa.es, strengthens its leadership in the real estate classified ads sector. Fotocasa and Habitaclia will continue to operate autonomously, although processes will be established so that both brands can learn from the strengths of the other.
In May 2017, Schibsted entered into an agreement to acquire Telenor's 25% interest in the Brazilian online classifieds operation olx.com.br and its 50% interest in the Chilean online classifieds operation Yapo.cl. The transaction was closed in June 2017. This lead to an increase in effective ownership of OLX Brazil from 25 to 50 percent and from 50 to 100 percent of Yapo in Chile. At the same time, Schibsted exited Malaysia, Vietnam and Myanmar by selling shares in 701 Search to Telenor. As a result of the difference in valuation between the assets in Asia and LatAm, Schibsted made a cash payment of USD 405 million to Telenor.
Schibsted presented in Q3 2017 a new organizational setup with two operational divisions, named "Marketplaces" and "Media", with effect from December 2017. The ambition is to enable Schibsted to further increase the speed of development and increasingly leverage our local competence and strong brands. In the new organization, digital product development will be better integrated with the business units, thereby coming closer to the users and be able to gain more impact in the local markets.
The overall strategy of Schibsted remains unchanged; to be a global leader in online classifieds, to develop world-class media houses and develop new growth services.
The new organizational model implies changes in the Group's management team. The new team consists of CEO Rolv Erik Ryssdal, EVP CFO Trond Berger, EVP People Tina Stiegler, EVP Chief Platform Officer Rian Liebenberg, and EVP Communication, Brand & Public Affairs Lena K. Samuelsson. Sondre Gravir is the CEO of the new Marketplaces division, whereas Raoul Grünthal is the CEO of the Media division.
On 21 November 2017, Schibsted completed an offering of 11,880.397 B-shares equal to 5.2% of the existing total share capital of the Company or equal to 10.0% of the Bshares outstanding. The Offering consisted of a private placement to institutional investors in Norway and internationally. Gross proceeds of the Offering amounted to approximately NOK 2,507 million, and the net proceeds from the Offering will be used to strengthen the Company's capital base and to finance strategic acquisition activities, especially within the Online Classifieds segment.
Net cash flow from operating activities was NOK 1,290 million for the year 2017, compared to NOK 1,506 million in 2016. Increase in gross operating profit contributes positively while increased tax payments and working capital are the primary items contributing negatively. A strong development in working capital in 2016 is followed by a poorer development in 2017.
Net cash outflows from investing activities was NOK 4,546 million for the year 2017, compared to NOK 1,248 million in 2016. The increase is primarily related to net cash outflows from investments in and sales of subsidiaries, joint ventures and associates.
Net cash inflows from financing activities was NOK 3,558 million for the year 2017, compared to a net cash outflow of NOK 877 million in 2016. The change is primarily related to increased borrowings from financing of investments and proceeds from share issue.
The carrying amount of the Group's assets increased by NOK 7,209 during 2017. The increase is primarily related to business combinations, increased investments in joint ventures and effects of foreign currency translation. The Group's net interest-bearing debt increased by NOK 1,540 million to NOK 2,614 million. The Group's equity ratio was 55% at the end of 2017, compared to 52% at the end of 2016.
Schibsted ASA repaid a bond of NOK 500 million in March. The loan was replaced by a new 7-year bond of NOK 500 million. To finance the acquisition of the Telenor deal, Schibsted ASA issued three new bonds in the domestic bond market in June, a 3-year FRN of NOK 1 billion, a 6 year FRN of 600 million and a 6-year bond with fixed interest of NOK 300 million. In addition, a new bridge facility of NOK 600 million was established and the revolving credit facility of EUR 300 million was drawn by NOK 1 billion. After the issue of B-shares in fourth quarter the bridge facility was repaid and the revolving credit facility of EUR 300 million was not drawn at year-end. The revolving credit facility of EUR 125 million has been cancelled.
A dividend of NOK 1.75 per share is proposed for 2017.
Schibsted sees continued revenue growth potential and inherent operational leverage for its portfolio of developed online classifieds sites, on the back of the strong brand
positions and traffic leadership in a range of markets and verticals. On a medium- to long-term horizon, the target for annual revenue growth remains at 15-20 percent, driven by increased monetization – particularly within verticals - and structural growth in online markets.
Our strategy of building online classifieds traffic and brand leadership positions as well as new product rollouts will continue as long as it is considered to create long-term shareholder value. We will focus on developing new mobile services, including native apps that are expanding the online classifieds markets. The native mobile marketplace Shpock has achieved good market positions and high level of user engagement in several markets. The positive trend in terms of profitability development in Brazil is expected to continue, and we expect OLX Brazil to grow well and show profitability in 2018. Full year investment phase losses are expected to go down compared to 2017.
The reduction in investment phase losses are driven by all assets on the back of increased monetization combined with reduced need for extraordinary marketing spending. Several sites are approaching break-even in 2018, some assets have been divested in 2017 and the spending level in Shpock will be lower in 2018 compared with 2017. The exact level of the investment phase losses will, among other things, depend on the pace of monetization growth and the competitive situation in each market.
Note that the investments are affecting profit and loss, and that the impact is split between consolidated companies (EBITDA) and joint ventures and associates.
The publishing operations of the media houses in Schibsted will continue the transformation into world-class digital media houses based on strong editorial products.
Overall, the structural digital shift and the transformation process are expected to continue. Schibsted will remain focused on digital product development combined with cost adaptations, aimed at producing continued healthy cash flows and operating margins. With a continued weak trend for print advertising, some margin contraction is likely during the coming 12 months.
Schibsted intends to leverage the strong local operations by utilizing the size of our international footprint by developing scalable components and converge towards common platforms. The adjusted organizational setup that was announced in Q3 2017 implies that the coordination and responsibility for the common components and platforms primarily will be allocated to each of the two divisions; Marketplaces and Media.
| Fourth quarter | Year | |||
|---|---|---|---|---|
| 2016 | 2017 | 2017 | 2016 | |
| 4,059 | 4,455 Operating revenues | 16,943 | 15,854 | |
| (124) | (113) Raw materials and finished goods | (432) | (500) | |
| (1,615) | (1,678) Personnel expenses | (6,317) | (6,141) | |
| (1,819) | (1,969) Other operating expenses | (7,588) | (7,082) | |
| 501 | 695 Gross operating profit (loss) | 2,606 | 2,131 | |
| (147) | (175) Depreciation and amortisation | (634) | (529) | |
| (45) | (29) Share of profit (loss) of joint ventures and associates | (113) | (171) | |
| (25) | (38) Impairment loss | (49) | (80) | |
| 11 | 28 Other income and expenses | 1,505 | (114) | |
| 295 | 479 Operating profit (loss) | 3,315 | 1,237 | |
| (7) | (66) Net financial items | (171) | 21 | |
| 288 | 414 Profit (loss) before taxes | 3,144 | 1,258 | |
| (194) | (207) Taxes | (958) | (699) | |
| 94 | 207 Profit (loss) | 2,186 | 559 | |
| Profit (loss) attributable to: | ||||
| 12 | 11 Non-controlling interests | 55 | 94 | |
| 82 | 196 Owners of the parent | 2,130 | 465 | |
| Earnings per share in NOK: | ||||
| 0.36 | 0.85 Basic | 9.36 | 2.05 | |
| 0.36 | 0.85 Diluted | 9.35 | 2.05 | |
| 0.44 | 0.88 Basic - adjusted | 3.43 | 2.70 | |
| 0.44 | 0.88 Diluted - adjusted | 3.43 | 2.69 | |
| 226,048 | 231,481 Weighted average number of shares outstanding (1,000) | 227,529 | 226,064 | |
| 226,247 | 231,694 Weighted average number of shares outstanding - diluted (1,000) | 227,804 | 226,315 |
| Year | ||||
|---|---|---|---|---|
| 2016 | 2017 | 2017 | 2016 | |
| 94 | 207 Profit (loss) | 2,186 | 559 | |
| 295 | 84 Remeasurements of defined benefit pension liabilities | (333) | (15) | |
| (74) | (23) Income tax relating to remeasurements of defined benefit pension liabilities | 77 | 4 | |
| - | (3) Share of other comprehensive income of joint ventures and associates | (3) | 5 | |
| 221 | 58 Items not to be reclassified subsequently to profit or loss | (259) | (6) | |
| 144 | 469 Exchange differences on translating foreign operations | 717 | (583) | |
| (8) | (34) Hedges of net investments in foreign operations | (55) | 68 | |
| 2 | 8 Income tax relating to hedges of net investments in foreign operations | 13 | (17) | |
| (4) | 4 Share of other comprehensive income of joint ventures and associates | (8) | 1 | |
| 134 | 447 Items to be reclassified subsequently to profit or loss | 667 | (531) | |
| 355 | 505 Other comprehensive income | 408 | (537) | |
| 449 | 712 Comprehensive income | 2,593 | 22 | |
| Comprehensive income attributable to: | ||||
| 13 | 13 Non-controlling interests | 61 | 76 | |
| 436 | 699 Owners of the parent | 2,533 | (54) |
| 31 December | ||
|---|---|---|
| 2017 | 2016 | |
| Intangible assets | 16,983 | 14,100 |
| Investment property and property, plant and equipment | 988 | 1,019 |
| Investments in joint ventures and associates | 4,514 | 954 |
| Other non-current assets | 364 | 353 |
| Non-current assets | 22,850 | 16,426 |
| Trade receivables and other current assets | 3,141 | 2,714 |
| Cash and cash equivalents | 1,626 | 1,268 |
| Current assets | 4,767 | 3,982 |
| Total assets | 27,617 | 20,408 |
| Equity attributable to owners of the parent | 14,793 | 10,235 |
| Non-controlling interests | 261 | 305 |
| Equity | 15,054 | 10,540 |
| Non-current interest-bearing borrowings | 4,212 | 1,814 |
| Other non-current liabilities | 2,586 | 2,447 |
| Non-current liabilities | 6,798 | 4,261 |
| Current interest-bearing borrowings | 28 | 528 |
| Other current liabilities | 5,736 | 5,079 |
| Current liabilities | 5,764 | 5,607 |
| Total equity and liabilities | 27,617 | 20,408 |
| Year | ||||
|---|---|---|---|---|
| 2016 | 2017 | 2017 | 2016 | |
| 288 | 414 Profit (loss) before taxes | 3,144 | 1,258 | |
| 172 | 215 Depreciation, amortisation and impairment losses | 685 | 609 | |
| (36) | (14) Net effect pension liabilities | (91) | (65) | |
| 44 | 32 Share of loss (profit) of joint ventures and associates, net of dividends received | 134 | 199 | |
| (56) | (150) Taxes paid | (828) | (577) | |
| (57) | (150) Sales losses (gains) non-current assets and other non-cash losses (gains) | (1,697) | (137) | |
| 355 | 347 Net cash flow from operating activities before change in working capital | 1,347 | 1,287 | |
| 150 | (11) Change in working capital and provisions | (57) | 219 | |
| 505 | 335 Net cash flow from operating activities | 1,290 | 1,506 | |
| (187) | (245) Development and purchase of intangible assets and property, plant and equipment | (865) | (698) | |
| (385) | (182) Acquistion of subsidiaries, net of cash acquired | (1,279) | (507) | |
| 2 | 11 Proceeds from sale of intangible assets and property, plant and equipment | 23 | 11 | |
| - | - Proceeds from sale of subsidiaries, net of cash sold | 380 | 1 | |
| (15) | (68) Net sale of (investment in) other shares | (2,929) | (69) | |
| 14 | 83 Net change in other investments | 124 | 14 | |
| (571) | (401) Net cash flow from investing activities | (4,546) | (1,248) | |
| (66) | (66) Net cash flow before financing activities | (3,256) | 258 | |
| (26) | (1,613) Net change in interest-bearing loans and borrowings | 1,772 | (313) | |
| (5) | (7) Change in ownership interests in subsidiaries | (228) | (70) | |
| - | 2,491 Capital increase | 2,491 | - | |
| (21) | 4 Net sale (purchase) of treasury shares | 17 | (5) | |
| (6) | (19) Dividends paid | (493) | (489) | |
| (58) | 855 Net cash flow from financing activities | 3,558 | (877) | |
| 4 | 54 Effects of exchange rate changes on cash and cash equivalents | 55 | (4) | |
| (120) | 843 Net increase (decrease) in cash and cash equivalents | 357 | (623) | |
| 1,388 | 783 Cash and cash equivalents at start of period | 1,268 | 1,891 | |
| 1,268 | 1,626 Cash and cash equivalents at end of period | 1,626 | 1,268 |
| Equity attributable to | Non-controlling | ||
|---|---|---|---|
| Year 2017 | owners of the parent | interests | Equity |
| Equity at start of period | 10,235 | 305 | 10,540 |
| Comprehensive income | 2,533 | 61 | 2,593 |
| Transactions with the owners | 2,025 | (105) | 1,921 |
| Capital increase | 2,494 | 7 | 2,501 |
| Share-based payment | 29 | (0) | 29 |
| Dividends paid to owners of the parent | (396) | - | (396) |
| Dividends to non-controlling interests | 12 | (98) | (86) |
| Change in treasury shares | 17 | - | 17 |
| Business combinations | - | 7 | 7 |
| Loss of control of subsidiaries | - | (16) | (16) |
| Changes in ownership of subsidiaries that do not result in a loss of control | (127) | (5) | (132) |
| Share of transactions with the owners of joint ventures and associates | (5) | - | (5) |
| Equity at end of period | 14,793 | 261 | 15,054 |
| Year 2016 | |||
| Equity at start of period | 10,776 | 314 | 11,090 |
| Comprehensive income | (54) | 76 | 22 |
| Transactions with the owners | (487) | (85) | (572) |
| Share-based payment | 42 | - | 42 |
| Dividends paid to owners of the parent | (396) | - | (396) |
| Dividends to non-controlling interests | 11 | (93) | (82) |
| Change in treasury shares | (5) | - | (5) |
| Business combinations | - | 9 | 9 |
| Loss of control of subsidiaries | - | (1) | (1) |
| Changes in ownership of subsidiaries that do not result in a loss of control | (139) | - | (139) |
| Equity at end of period | 10,235 | 305 | 10,540 |
The condensed consolidated interim financial statements comprise the Group and the Group's interests in joint ventures and associates. The interim financial statements have been prepared in compliance with IAS 34 Interim Financial Reporting.
The accounting policies adopted in preparing these interim financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2016.
Schibsted has recognised actuarial losses of NOK 256 million net of tax related to remeasurement of defined benefit pension obligations in Other comprehensive income. The amount recognised is primarily related to changes in financial assumptions.
The interim financial statements are unaudited. All numbers are in NOK million unless otherwise stated. Tables may not summarize due to roundings.
During 2017, Schibsted has invested NOK 1,279 million related to acquisition of businesses (business combinations). The amount comprises cash consideration transferred reduced by cash and cash equivalents of the acquiree. The amount includes NOK 1 million of contingent consideration paid related to prior year's business combinations.
In January 2017, Schibsted acquired the real estate portal Habitaclia.com through the acquisition of 100% of the shares of Habitaclia, S.L.U and Inmofusion, S.L.U. Schibsted Spain, owner of the Spanish real estate site Fotocasa.es, thereby strengthened its leadership in the real estate classified ads segment.
In June 2017, Schibsted increased its ownership interest from 50% to 100% in Yapo.cl SpA, a company operating the Chilean online classifieds site Yapo.cl. The previously held ownership interest was accounted for as a joint venture and the business combination is accounted for as a step acquisition. The acquisition was part of a larger agreement with Telenor described further under the subheading Other changes in the composition of the Group below.
In November 2017, Schibsted acquired the French real estate online classifieds operation avendrealouer.fr through the acquisition of 100% of the shares of CityOne SAS. The acquisition strengthens Schibsted's product offering and market position among professional real estate agents in France.
Schibsted has also been involved in some other minor business combinations, including step acquisitions.
In step acquisitions, the previously held equity interest is measured at fair value at the acquisition date, and a total gain from remeasurement of NOK 506 million is recognised in profit or loss in the line item Other income and expenses. Acquisitionrelated costs of NOK 8 million related to business combinations are recognised in profit or loss in the line item Other income and expenses.
The tables below summarise the consideration transferred and the preliminary amounts recognised for assets acquired and liabilities assumed after the business combinations:
| Total business | |||
|---|---|---|---|
| Yapo.cl | Other | combinations | |
| Consideration: | |||
| Cash | 582 | 788 | 1,370 |
| Deferred consideration | - | - | - |
| Fair value of previously held equity interest | 442 | 75 | 517 |
| Total | 1,024 | 863 | 1,887 |
| Amounts for assets and liabilities recognised: | |||
| Intangible assets | 65 | 162 | 227 |
| Other non-current assets | 1 | 3 | 4 |
| Current assets | 18 | 114 | 132 |
| Non-current liabilities | (123) | 60 | (63) |
| Current liabilities | (11) | (92) | (103) |
| Total identifiable net assets | (50) | 247 | 197 |
| Non-controlling interests | - | (7) | (7) |
| Goodwill | 1,074 | 623 | 1,697 |
| Total | 1,024 | 863 | 1,887 |
Schibsted has during 2017 invested NOK 228 million related to increased ownership interests in subsidiaries. The amount invested is primarily related to increase in effective ownership interest in Finn Eiendom AS from 79.8% to 90%.
In May 2017, Schibsted discontinued the operation and sold certain assets of the online classifieds site Kapaza.be in Belgium.
In May 2017, Schibsted entered into an agreement to acquire Telenor's 25% interest in the Brazilian online classifieds operation olx.com.br and its 50% interest in the Chilean online classifieds operation Yapo.cl. Simultaneously, Schibsted entered into an agreement to sell to Telenor its 33.3% ownership interest in the associate 701 Search Pte Ltd operating online classifieds operations in Malaysia, Vietnam and Myanmar. The transactions were closed 30 June 2017. As a result of differences in value of assets acquired and sold, Schibsted made a cash payment of USD 405 million. Before the transaction, the Brazilian and Chilean operations were both joint ventures of Schibsted, accounted for using the equity method of accounting. The transaction in respect of olx.com.br is accounted for as an increase in ownership interest of a joint venture from 25% to 50%. The transaction in respect of Yapo.cl in Chile is accounted for as a business combination as described above.
In August 2017, Schibsted closed the sale of its 90.2% interest in the Swedish online directory service Hitta.se.
Total net gains of NOK 1,066 million from the sale of subsidiaries, joint ventures and associates is recognised in profit or loss in the line item Other income and expenses.
Schibsted reports five operating segments; Online Classifieds (Norway, Sweden and International) and Media Houses (Norway and Sweden). For information about the segments, see note 6 to the Annual consolidated financial statements.
Gross operating profit (loss) excl. Investment phase excludes operations in growth phase with large investments in market positions, immature monetization rate and where sustainable profitability has not been reached.
Information about operating revenues and profit (loss) by operating segment:
| Online Classifieds | Media Houses | Other / | ||||||
|---|---|---|---|---|---|---|---|---|
| Fourth quarter 2017 | Norway | Sweden International | Norway | Sweden Headquarters Eliminations | Total | |||
| Operating revenues from external customers | 459 | 248 | 1,352 | 1,358 | 1,008 | 29 | - | 4,455 |
| Operating revenues from other segments | 14 | 9 | 23 | 50 | 50 | 161 | (308) | (0) |
| Operating revenues | 474 | 257 | 1,376 | 1,409 | 1,058 | 190 | (308) | 4,455 |
| Gross operating profit (loss) excl. Investment phase | 170 | 128 | 488 | 128 | 168 | (236) | - | 845 |
| Gross operating profit (loss) | 163 | 123 | 349 | 128 | 168 | (236) | - | 695 |
| Operating profit (loss) | 150 | 119 | 265 | 24 | 106 | (185) | - | 479 |
| Year 2017 | ||||||||
| Operating revenues from external customers | 1,870 | 1,017 | 4,886 | 5,189 | 3,900 | 81 | - | 16,943 |
| Operating revenues from other segments | 60 | 34 | 80 | 193 | 177 | 537 | (1,080) | -0 |
| Operating revenues | 1,929 | 1,051 | 4,966 | 5,382 | 4,077 | 618 | (1,080) | 16,943 |
| Gross operating profit (loss) excl. Investment phase | 768 | 544 | 1,737 | 552 | 573 | (878) | - | 3,297 |
| Gross operating profit (loss) | 705 | 504 | 1,149 | 552 | 573 | (878) | - | 2,606 |
| Operating profit (loss) | 657 | 495 | 2,175 | 331 | 608 | (950) | - | 3,315 |
| Fourth quarter 2016 | ||||||||
| Operating revenues from external customers | 390 | 233 | 1,043 | 1,378 | 1,000 | 15 | - | 4,059 |
| Operating revenues from other segments | 16 | 8 | 24 | 43 | 46 | 81 | (218) | - |
| Operating revenues | 406 | 241 | 1,067 | 1,421 | 1,046 | 96 | (218) | 4,059 |
| Gross operating profit (loss) excl. Investment phase | 141 | 121 | 355 | 139 | 138 | (213) | - | 682 |
| Gross operating profit (loss) | 138 | 111 | 189 | 139 | 138 | (214) | - | 501 |
| Operating profit (loss) | 175 | 108 | 119 | 89 | 89 | (285) | - | 295 |
| Year 2016 | ||||||||
| Operating revenues from external customers | 1,587 | 1,021 | 3,972 | 5,222 | 3,968 | 84 | - | 15,854 |
| Operating revenues from other segments | 63 | 31 | 113 | 171 | 177 | 301 | (856) | - |
| Operating revenues | 1,650 | 1,052 | 4,085 | 5,393 | 4,145 | 385 | (856) | 15,854 |
| Gross operating profit (loss) excl. Investment phase | 670 | 577 | 1,403 | 439 | 507 | (692) | - | 2,904 |
| Gross operating profit (loss) | 658 | 547 | 692 | 439 | 507 | (712) | - | 2,131 |
| Operating profit (loss) | 671 | 526 | 379 | 165 | 348 | (852) | - | 1,237 |
For further information on gain from sales and remeasurement, see note 2.
| Fourth quarter | Year | ||
|---|---|---|---|
| 2016 2017 |
2017 | 2016 | |
| (22) | (29) Net interest income (expenses) | (94) | (73) |
| 18 | (32) Net foreign exchange gain (loss) | (60) | 64 |
| (3) | (4) Net other financial income (expenses) | (16) | 30 |
| (7) | (66) Net financial items | (171) | 21 |
This section includes definitions and reconciliations of financial measures presented in this report. These financial measures are included as they provide information of our financial performance in addition to the financial statements presented in accordance with IFRS.
Gross operating profit (loss)
Gross operating profit (loss) / Operating revenues
Growth rates adjusted for currency effects are calculated using the same foreign exchange rates for the period last year and this year.
| Fourth quarter | ||||
|---|---|---|---|---|
| 2016 | 2017 Currency rates used when converting profit or loss | 2017 | 2016 | |
| 0.9262 | 0.9812 Swedish krona (SEK) | 0.9680 | 0.9823 | |
| 9.0356 | 9.6157 Euro (EUR) | 9.3301 | 9.2927 | |
| Online classifieds - Developed phase | |
|---|---|
| Subsidiaries | Joint ventures and associates |
| Norway: Finn, MittAnbud and Lendo | Malaysia: Mudah (until Q2 2017) |
| Sweden: Blocket, Servicefinder and Bytbil | Austria: Willhaben |
| France: Leboncoin, MB Diffusion, Kudoz and Avendrealouer |
Spain: mainly Coches, FotoCasa, Vibbo, Milanuncios, InfoJobs, Habitaclia Italy: Subito Ireland: Daft, Done Deal and Adverts Hungary: Hasznaltauto Colombia: Fincaraiz
Subsidiaries Joint ventures and associates Finland: Tori Chile: Yapo (as 50% JV until Q2 2017) Hungary: Jofogas Brazil: OLX (increased ownership from 25% to 50% from Q3 2017) Italy: Infojobs Vietnam: Cho Tot (until Q2 2017) Brazil: Infojobs Indonesia: OLX Chile: Yapo (as subsidiary from Q3 2017) Thailand: Kaidee Mexico: Segundamano Bangladesh: Ekhanei (until Q2 2017) Belgium: Kapaza (until Q2 2017) Belarus: Kufar Tunisia: Tayara Morocco: Avito Dominican Republic: Corotos Portugal: Custo Justo Shpock in all markets: Austria, Germany, United Kingdom, Norway, Sweden and Italy Price comparison and personal finance marketplaces in early stage in certain markets are included here
Online classifieds operations in investment phase are defined as operations in growth phase with large investments in market positions, immature monetization rate and sustainable profitability has not been reached.
| Fourth quarter | Reconciliation of EBITDA excl. Investment phase and gross operating profit in accordance | Year | ||
|---|---|---|---|---|
| 2016 | 2017 | with financial statements | 2017 | 2016 |
| 682 | 845 EBITDA excl. Investment phase | 3,297 | 2,904 | |
| (180) | (151) EBITDA Investment phase Online Classifieds | (690) | (753) | |
| (1) | 0 EBITDA Investment phase Other | (1) | (20) | |
| 501 | 695 Gross operating profit (loss) | 2,606 | 2,131 |
| Fourth quarter | Reconciliation of Online classifieds pro forma information and Operating segments in | Year | ||
|---|---|---|---|---|
| 2016 | 2017 | accordance with financial statements (EUR million) | 2017 | 2016 |
| 1,714 | 2,106 Online Classifieds operating revenues in Operating segments (in NOK) | 7,946 | 6,787 | |
| 189.8 | 219.0 Online Classifieds operating revenues in Operating segment disclosure | 851.1 | 730.8 | |
| 7.8 | 11.1 Operating revenues from joint ventures and associates | 38.3 | 25.9 | |
| (0.3) | (0.0) Operating revenues from other Online Classifieds companies | (0.5) | (1.4) | |
| (5.2) | (3.9) Eliminations | (17.6) | (22.1) | |
| 192.1 | 226.2 Pro forma operating revenues | 871.3 | 733.2 | |
| 438 | 635 Online Classifieds gross operating profit in Operating segments (in NOK) | 2,358 | 1,897 | |
| 48.4 | 66.1 Online Classifieds EBITDA in Operating segment disclosure | 252.1 | 204.2 | |
| (2.2) | (0.3) EBITDA from joint ventures and associates | (2.3) | (9.5) | |
| 1.6 | 2.4 EBITDA from other Online Classifieds companies | 9.9 | 4.5 | |
| 47.8 | 68.2 Pro forma EBITDA | 259.6 | 199.2 |
Other Online Classifieds companies are companies not included in pro forma Online Classified, that mainly consist of holding companies and overhead within Online Classifieds International.
| Fourth quarter | Year | |||
|---|---|---|---|---|
| 2016 | 2017 | Online classifieds pro forma information - details (EUR million) | 2017 | 2016 |
| 43.2 | 48.5 Norway | 201.2 | 170.9 | |
| 25.9 | 25.8 Sweden | 109.0 | 110.0 | |
| 58.2 | 69.6 France | 257.4 | 214.0 | |
| 28.7 | 36.6 Spain | 137.7 | 110.7 | |
| 22.3 | 22.8 Other | 89.3 | 82.9 | |
| 178.3 | 203.2 Developed phase | 794.6 | 688.5 | |
| 13.8 | 23.0 Investment phase | 76.7 | 44.7 | |
| 192.1 | 226.2 Pro forma operating revenues | 871.3 | 733.2 | |
| 15.6 | 17.8 Norway | 82.3 | 72.1 | |
| 13.5 | 13.3 Sweden | 58.2 | 62.1 | |
| 35.0 | 38.1 France | 152.5 | 129.2 | |
| 4.7 | 11.0 Spain | 34.4 | 23.7 | |
| 1.9 | 4.3 Other | 11.7 | 5.7 | |
| 70.7 | 84.6 Developed phase | 339.3 | 292.8 | |
| (22.9) | (16.3) Investment phase | (79.6) | (93.6) | |
| 47.8 | 68.2 Pro forma EBITDA | 259.6 | 199.2 |
| Fourth quarter | Year | ||||
|---|---|---|---|---|---|
| 2016 | 2017 Developed phase (EUR million) | 2017 | 2016 | ||
| 69.9 | 84.2 EBITDA subsidiaries | 336.3 | 289.7 | ||
| 0.8 | 0.4 EBITDA joint ventures and associates | 3.0 | 3.1 | ||
| 70.7 | 84.6 EBITDA | 339.3 | 292.8 |
| Fourth quarter | Year | |||
|---|---|---|---|---|
| 2016 | 2017 Investment phase (EUR million) | 2017 | 2016 | |
| (19.9) | (15.7) EBITDA subsidiaries | (74.3) | (81.0) | |
| (3.0) | (0.7) EBITDA joint ventures and associates | (5.3) | (12.6) | |
| (22.9) | (16.3) EBITDA | (79.6) | (93.6) |
| Fourth quarter | Year | ||
|---|---|---|---|
| 2016 | 2017 Underlying tax rate | 2017 | 2016 |
| 288 | 414 Profit (loss) before taxes | 3,144 | 1,258 |
| 45 | 29 Share of profit (loss) of joint ventures and associates | 113 | 171 |
| 149 | 234 Other losses for which no deferred tax benefit is recognised | 1,000 | 715 |
| 41 | (24) Gain on sale and remeasurement of subsidiaries, joint ventures and associates | (1,023) | (39) |
| 15 | 3 Impairment losses (goodwill and associates) | 3 | 31 |
| 538 | 656 "Adjusted" tax base | 3,237 | 2,136 |
| 194 | 207 Taxes | 958 | 699 |
| 36.1 % | 31.5 % Adjusted effective tax rate | 29.6 % | 32.7 % |
| 31 December | |||
|---|---|---|---|
| Liquidity reserve | 2017 | 2016 | |
| Cash and cash equivalents | 1,626 | 1,268 | |
| Unutilised drawing rights on credit facilities | 2,952 | 3,862 | |
| Liquidity reserve | 4,578 | 5,130 |
| 31 December | ||
|---|---|---|
| Net interest-bearing debt | 2017 | 2016 |
| Non-current interest-bearing borrowings | 4,212 | 1,814 |
| Current interest-bearing borrowings | 28 | 528 |
| Cash and cash equivalents | (1,626) | (1,268) |
| Net interest-bearing debt | 2,614 | 1,074 |
Equity / Total assets
Profit (loss) attributable to owners of the parent / Average number of shares outstanding
Profit (loss) attributable to owners of the parent / Average number of shares outstanding (diluted)
| Fourth quarter | Year | ||
|---|---|---|---|
| 2016 | 2017 Earnings per share - adjusted | 2017 | 2016 |
| 82 | 196 Profit (loss) attributable to owners of the parent | 2,130 | 465 |
| (11) | (28) Other income and expenses | (1,505) | 114 |
| 25 | 38 Impairment loss | 49 | 80 |
| 3 | (4) Taxes and Non-controlling interests related to Other income and expenses and Impairment loss | 106 | (49) |
| 99 | 203 Profit (loss) attributable to owners of the parent - adjusted | 780 | 610 |
| 0.44 | 0.88 Earnings per share – adjusted (NOK) | 3.43 | 2.70 |
| 0.44 | 0.88 Diluted earnings per share – adjusted (NOK) | 3.43 | 2.69 |
| Fourth quarter | Year | ||||
|---|---|---|---|---|---|
| 2016 | 2017 | 2017 | 2016 | ||
| Pro forma Online Classifieds | |||||
| 178.3 | 203.2 Operating revenues Developed phase (EUR million) | 794.6 | 688.5 | ||
| 70.7 | 84.6 EBITDA Developed phase (EUR million) | 339.3 | 292.8 | ||
| 40 % | 42 % EBITDA margin Developed phase | 43 % | 43 % | ||
| (22.9) | (16.3) EBITDA Investment phase (EUR million) | (79.6) | (93.6) | ||
| Operating revenues for operating segments | |||||
| 406 | 474 Online Classifieds Norway | 1,929 | 1,650 | ||
| 241 | 257 Online Classifieds Sweden | 1,051 | 1,052 | ||
| 1,067 | 1,376 Online Classifieds International | 4,966 | 4,085 | ||
| 1,421 | 1,409 Media House Norway | 5,382 | 5,393 | ||
| 1,046 | 1,058 Media House Sweden | 4,077 | 4,145 | ||
| EBITDA Group | |||||
| 682 | 845 EBITDA excl. Investment phase | 3,297 | 2,904 | ||
| 501 | 695 EBITDA (gross operating profit (loss)) | 2,606 | 2,131 | ||
| Operating margin | |||||
| 17 % | 20 % EBITDA excl. Investment phase | 20 % | 19 % | ||
| 12 % | 16 % EBITDA (gross operating profit (loss)) | 15 % | 13 % | ||
| Operating margins operating segments (EBITDA) | |||||
| 34 % | 34 % Online Classifieds Norway | 37 % | 40 % | ||
| 46 % | 48 % Online Classifieds Sweden | 48 % | 52 % | ||
| 18 % | 25 % Online Classifieds International | 23 % | 17 % | ||
| 10 % | 9 % Media House Norway | 10 % | 8 % | ||
| 13 % | 16 % Media House Sweden | 14 % | 12 % | ||
| Cash flow and capital factors | |||||
| Equity ratio | 55 % | 52 % | |||
| Interest-bearing borrowings | 4,240 | 2,342 | |||
| Net interest-bearing debt | 2,614 | 1,074 | |||
| 505 | 335 Cash flow from operating activities | 1,290 | 1,506 | ||
| 2.23 | 1.45 Cash flow from operating activities per share (NOK) | 5.67 | 6.66 | ||
| 187 | 245 CAPEX | 865 | 698 |
Schibsted ASA
Apotekergata 10, P.O. Box 490 Sentrum NO-0105 Oslo
Tel: +47 23 10 66 00 Fax: +47 23 10 66 01 E-mail: [email protected] www.schibsted.com
Investor information: www.schibsted.com/ir
| Annual General Meeting | 3 May 2018 | |||
|---|---|---|---|---|
| Q1 report 2018 | 3 May 2018 | |||
| Q2 report 2018 | 17 July 2018 | |||
| Q3 report 2018 | 26 October 2018 | |||
| For information regarding conferences, roadshows etc., please visit www.schibsted.com/en/ir/Financial-calendar/ |
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