Adevinta — Earnings Release 2019

Feb 12, 2020

FY 2019 Results

Rolv Erik Ryssdal, CEO Uvashni Raman, CFO Gianpaolo Santorsola, EVP, Spain & Brazil

12 February 2020

Creating perfect matches on the world's most trusted marketplaces

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Overview

Rolv Erik Ryssdal CEO

FY financial performance reflecting successful execution

Strong growth in the main market verticals and investment to support future growth areas

FY 2019 achievements: structure & organisation

FY 2019 achievements: external investment

FY 2019 achievements: CSR

Q4 2019 financial performance

Good quarter following a very strong Q3

Verticals revenues	Total revenues	EBITDA	Cash flow
20 % Including L'Argus	16 % to €200 million	16 % to €52 million	x2.8 to €26 million
France up 28% Spain up 14%	Slight sequential deceleration in organic growth following strong Q3 More than offset by contribution from bolt on acquisitions	Stable EBITDA margin at 26% Despite strong investment in product and marketing	Operating profit driving cash flow Strong contribution from working capital

France

Sustained performance driven by verticals

Operations continue to deliver

• 5bn visits reached in the year
• Acceleration of product development, notably on transactions

Revenues up 25% (or 13% excl. L'Argus))

• Negative impact of strikes in Q4
• Verticals revenue up 28% yoy including contribution from l'Argus - driven by cars and real estate, despite softness in jobs
• Continuing advertising softness, but trend improving

EBITDA margin down to 49.0%

• Strong core* margins (54%)
• Impact of marketing campaigns delayed from Q3 to Q4
• Integration and rationalisation of l'Argus in progress

The effect of IFRS 16 implementation on Operating expenses and EBITDA for France is €1.4 million in Q4 2019. Excluding the IFRS 16 effect EBITDA margin for France is 48% in Q4 2019 * Includes LBC, AVAL, Kudoz and Vide Dressing

France

Increasing the total addressable market to create more value

	Profitability profile	Growth opportunity	Enabler
Core verticals c.60% of actual revenue currently	++++	Continue to expand market position	Enlarging the offering and increasing added value for customers
Consumer goods Including advertising	++	Increasing monetization of private content	Ramp-up of transactional model
Adjacent markets (holidays/travel, services, e-commerce)	++	Expand in new markets	Capitalise on leadership in existing markets

Spain

Strong performance despite softer macro environment

Product development underpins acceleration in traffic in Coches.net, Fotocasa and Habitaclia

Revenue up 13% yoy despite macro economic slowdown

• 14% growth in verticals driven mostly by cars
• Advertising accelerating significantly

EBITDA margin up 6 pts to 35%, driven by:

• Operational leverage
• Cost structure optimization and marketing phasing

Spain Revenues and EBITDA margin (€ millions)

Brazil

Top line growth fueling operational leverage

Development of transaction model and improved customer experience and safety

Local currency growth of 23%

• Driven by Cars and Real Estate
• Recovered positive growth in advertising

EBITDA margin reached 20.6%

• Driven by operational leverage
• Q4 2018 impacted by one-offs

Brazil Revenues and EBITDA margin (€ millions)

Global markets

Continued focus on improving revenue mix / Disappointing performance in Italy

Revenue up 1% yoy

• Weakness in display advertising, notably in Italy
• Solid growth in verticals, mainly cars and real estate

Positive EBITDA contribution at €1m

• Operational leverage in Ireland and Hungary
• Cost structure improvement
• €(1.5)m one-off in Morocco

Action plans in implementation in Italy:

• Change in management
• Restructuring of the organisation and cost optimisation
• Shift in strategy towards more verticalization
• Ramp-up of product and tech development

Ongoing assessment and active management of the portfolio

Global markets

Key market update

Italy	Willhaben	Ireland	Hungary	Shpock
Weak display advertising	Good development in	Good performance in core verticals	Good growth in both
Good development in	the verticals		online classifieds and advertising
cars (market share gain and ARPU increase)	Negative trend in display advertising	Flat trends in display advertising	Expansion of	results
Soft job market due to macro environment	Continued	Expansion of car	transactional footprint in consumer goods by

Continued enhancement in product development:

• Search filtering improved
• Launch of behavior-based recommendations

Expansion of car financing functionality to dealer base and market share gain in cars content while expanding ARPU

Positive momentum in real estate market

Expansion of transactional footprint in consumer goods by adding new categories and shipping partners

Full implementation of transactional flow

Encouraging early results

Financials

Uvashni Raman CFO

Q4 financial performance

Proportionate incl JVs Revenues € millions

EBITDA proportionate incl JVs € millions

Operating cash flow € millions

FY financial performance

Proportionate incl JVs Revenues € millions

EBITDA proportionate incl JVs € millions

Operating cash flow € millions

Verticals revenues continued growth momentum in FY 2019 Display advertising muted growth

Revenue growth driven by strong verticals

EBITDA improves 32% yoy

Main non-operational items

• Impairment charge of €25m (mainly Mexico)
• Other expenses of €13m (mostly IPO-related costs and restructuring costs)
• Tax : underlying tax rate from 33.5% in 2018 to 28.2% in 2019 (mainly application of previous year's tax losses in France). Excluding this effect, the underlying tax rate for 2019 would have been 32.7%

Strong operating CF generation

Strong balance sheet

Improved bank financing

• Leverage ratio of Net Interest-Bearing Debt (NIBD¹ ) to EBITDA² of 0.7 as of 31/12/2019.
• Negotiations ongoing to refinance its EUR 300 million Revolving Credit Facility (EUR 200 million drawn as of 31.12.2019)
• Increase financial flexibility, improve overall terms and adjust the banking group to reflect Adevinta's International footprint
• New Facility:
  • Size: EUR 600 million
  • Consortium of 6 banks
  • Tenor of 5 years with two one-year extension options (includes an accordion increase option)

Dividend policy

• In 2019, Adevinta invested EUR 190.5 million in acquisitions. Adevinta's financial position as of December 31st, 2019 includes:
  • cash and cash equivalents of EUR 72 million
  • Revolving Credit Facility of EUR 300 million (EUR 200 million drawn)
• Dividend policy remains unchanged but may be subject to financial capacity to fund value accretive growth opportunities
• No dividend will be paid for full year 2019 as announced at IPO

Outlook

Rolv Erik Ryssdal CEO

2020 outlook

• Continue to strengthen market positions in a more challenging macro environment in Spain and France
• Continued investment in product & tech to enhance user experience, improve trust and reduce friction
• Traction in transactional model though still early stage
• Continue to explore growth opportunities in existing and adjacent markets
• Improving trend in advertising albeit at lower growth level

Strong growth potential Growing addressable market

Adevinta Spain & OLX Brazil Update

Gianpaolo Santorsola SVP, Spain & Brazil

Significant structural growth potential

Source: 1 International Monetary Fund World Economic Outlook 2018; 2 Zenith December 2018

revenues

Source: Internet World Stats / Schibsted & Adevinta reported

Adevinta Spain

Adevinta Spain has a portfolio of brands with leading positions across multiple verticals, with further potential to expand

Leadership positions with potential to expand in the core business, its adjacencies and across value chains

Financial and operational performance beating underlying trends and delivering operational leverage

Relentlessly converging products & data platforms for faster product innovation

Continued investment in product incorporating advanced technologies such as machine learning

Adevinta is the largest online classifieds group in Spain

We have solid leading positions across the main vertical segments

		Traffic	Listings	Customers
Jobs		1 1	NA	NA
Cars		1 1	2 1	2 1
Real Estate		3 2	2 1	2 1
Generalist		1 2	4 2	NA

1. Ipsos: 2019 avg. Question "Which of the following online, mobile sites or apps have you visited in the past 6 months?" (or "offering jobs and employment opportunities" or "for secondhand cars / vehicles"). Sample avg Jobs 928, Motor 668, Real estate 981, Marketplaces 1,213 (answers "Amazon" considered n/a); 2. Autobiz: 2019 avg.; 3. Insights by SimilarWeb (www.similarweb.com) – 2019 average. Desktop & Mobile web 4. Mgmt estimate based on proxy. Question: "Where have you sold second hand goods during the last 6 months? Ipsos: 2019 avg.Sample avg. 994

We keep executing our strategy based on vertical leadership and cross-brand transversal initiatives

Offering the greatest experience to our users and customers Attracting, developing and retaining the best talent Leveraging our data as a competitive advantage

In 2019, we have continued growing strongly in both revenue and profitability

We are progressively optimizing marketing and personnel costs to improve our operational leverage

We are outperforming the markets, which show a slower development

In jobs, we improved the search experience with machine learning and deployed new products to increase engagement

Machine learning enabled products

"How You Match" assessment of a candidate fit with a given offer

	16:03 ← Detalle de la oferta V
	Auxiliar Administrativo/a
57	Schibsted Spain
	Barcelona, Barcelona
	30.000€ - 35.000€ Bruto/año
	Publicada hace 2 horas
	Contrato indefinido Jornada completa
00	6 Inscritos
	O 75% compatible con la oferta Mar, tu CV coincide en bastantes requisitos de la oferta
	VER COMPATIBILIDAD
	Requisitos
	INSCRIBIRME

Job and skill normalization to enable better matching

	16:53 回 国					国三十年三次演
←	Progra
0)				Programador/a web
				Programador/a de aplicaciones
	Programador/a de sistemas
				Programador/a de bases de datos
ULTIN	Program manager Programador en Barcelona
	Todas las categorías
	Adevinta en Barcelona
				Programa Programa Programador "
				2 3 4 5 6 7 8 9 0
				wertyuiopp
				a s d f g h j k l ñ
				z x c v b n m ca
!#7				Español (ES)				Hecho

"Follow Company" enables candidates to receive updates from selected companies

Just launched "Company Reviews" with >1.6M employee reviews

Engagement products

"JobMail" allows companies to proactively reach out to multiple candidates with one click

37

We have increased this year the distance in usage vs our closest competitors, while continue growing revenue and ARPU

1 Survey run by Ipsos, proxy metric for Visitors in an aggregated 6 months period – Question: "Which of the following online, mobile sites or apps offering jobs and employment opportunities have you visited in the past 6 months? (or in the past month?)" Sample avg. monthly 973 respondents; 2 Survey run by TNS – 2018. One off study with 1,002 individuals. Displayed in chart only top sites; 3 Company information; 4 Related customer metric definition refers to those publishers which have purchased an Infojobs recruitment related paid product during the year (excl. non OLC advertising). Not factored-in revenue deferrals for ARPU displayed;

In motor, we have improved liquidity and built new products for our more sophisticated customers

Content sharing

"Larger inventory" increased our private content in Coches.net for a more exhaustive offering

"Similar Ads" give users access to more relevant content from selected dealers

New products for dealers

"Call me Back" enables users to schedule a call from a dealer at moment of choice

39

Our sites clearly lead the category and we have been able to monetize such position and deliver impressing revenue growth

Survey run by Ipsos, proxy metric for Visitors in an aggregated 6 months period – 2019 Q4 avg. Question: "Which of the following online, mobile sites or apps for second-hand cars / vehicles have you visited in the past 6 months? " Sample avg. monthly 687 respondents Answers "Segundamano" & "Compramostucoche.es" considered n/a; 2 Autobiz – 2019 Q4 avg. 3. Company information. Includes all motor categories; 4. Monthly average. Related customer metric definition refers to those publishers which have purchased a recurrent related paid product (excl. non OLC advertising & web channels).

In real estate, we have boosted content and increased our audience through engagement and improved user experience

Content

Content boost by sharing between fotocasa and habitaclia and improving our publishing tools

Engagement

Dramatically increased our visits coming from alerts both in fotocasa and habitaclia

Map search

Improved user experience by reinforcing our zoning and solving key pain points in the map search user experience

Despite market slowdown we grew traffic, content and revenues

1. Survey run by Ipsos, proxy metric for Visitors in an aggregated 6 months period – 2019 Q4 avg.. Question: "Which of the following online, mobile sites or apps for renting, buying, or selling real estate have you visited in the past 6 months? " Sample avg. monthly 974 respondents Answers "Airbnb" considered n/a; 2 Autobiz – 2019 Q4 avg. 3. Company information; 4. Monthly average – related customer metric definition refers to those publishers which have purchased a recurrent related paid product (excl. non OLC advertising & web channels); Combined ARPU calculated weighting (based on revenue) Fotocasa's ARPU growth and Habitaclia's ARPU growth

We keep converging on infrastructure, software components and tooling, enabling for faster innovation and cost reduction

CURRENT

94%+ of infrastructure already on the cloud using the same monitoring, cost saving and security tools

100% of web and app engineers working on a common platform (same architecture, tooling, catalog of reusable components and best practices)

Several third party tools unified in a single one (analytics, marketing automation, ERP, etc)

91 software components reused across our marketplace products in Spain

One common and shared data platform enabling teams to leverage on data from other marketplaces while complying with GDPR

PLAN FOR 2020

Progressive consolidation of multiple CRMs into one common system

Migration towards one common backend access tool for our real estate marketplaces

50+ use cases applying machine learning across Adevinta Spain

OLX Brazil

OLX Brazil has leading positions in the main segments of an immature market with great growth potential

Strong brand recognition across large and engaged audience

Big market opportunity driven by cyclical recovery and shift to online

Leading position in cars and is shifting towards a more convenient and safe experience

Growing fast in Real Estate against strong local competitors

Developing transactional horizontal experience with wallet, escrow and financing. New untapped potential

OLX Brazil is "Sellers' First Choice" & ToM in Verticals

OLX Brazil has delivered solid profitable growth during 2019

1 Excluding ESOP impact

In Cars, we have worked to reduce friction in the buy&sell experience

Car financing and insurance

Optimized car financing journey, adding more options for consumers & simpler experience

Safety improvements

Safer OLX experience with proprietary fingerprint technology, improved detection algorithms & extended user verification

Deeper verticalization

Launched the first test of sell-itfor-me (partnership) and carhistory reports

Traffic leadership has strengthened and customer base growth has been the key driver for revenues uplift

Source: 1 Comscrore Dec 2019; 2 Autobiz Dec 2019; 3 The number of dealer advertisers is measured by the number of different telephone numbers identified on the website as a dealer. The stock is measured by the number of classified ads online the dealer has on the analysed website 49 In real estate, we have improved the discovery experience and given more tools to sellers to assess the quality of leads

Discovery experience

Optimized consumer experience, adding more transparency about home attributes & location

Detalhes do imóvel
	Quarto de serviço		Área de serviço
	Armários no quarto		Armários na cozinha
	Mobiliado		Ar condicionad
	Churrasqueira		Varanda
Detalhes do condomíno
န်ဂို	Elevador	24	Segurança 24h
	Portaria		Permitido animais
ក្រហូ	Condomínio fechado		Piscina
11-0	Academia	1	Salão de festas

Real Estate financing Lead quality

Launched new real estate financing solution

Developed algorithmic evaluation of lead quality & empowered sellers with guidance on improving content quality

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Traffic leadership has expanded, in content we have closed the gap with #2; revenue growth driven by customer base and ARPU

Source: 1 Comscrore Dec 2019; 2 Autobiz Dec 2019; 3 The number of agents is counted via the number of agent minisites on each portal except on OXL where the number of agents is counted via the number of telephone numbers linked to 5 listing or more (this criteria was 10 listing or more until October 2018) 51

In the horizontal segment, OLX Brazil is developing transactional experience with wallet, escrow and financing

Transactional marketplace will unlock user growth and future monetization

• Wallet
• Escrow
• Financing
• Reduces trust & safety issues
• Meets demand from 35% of OLX Brazil users that don't have a bank account
• Drives growth Enables installments and financing to 41% of Brazilians without access to credit
• New revenue stream for OLX, but at lower margins vs traditional classifieds

Spain and OLX Brazil: highlights

Markets with significant structural growth potential in terms of digital spending and OLC penetration, when compared to international benchmarks

Leadership positions in the most profitable segments in the OLC space: Cars, Real Estate, Jobs

Strong financial profile both in terms of topline growth and margin improvements; further room for growth in new revenue streams (transactional, financing)

Continued investments in product development (technology and capabilities) to sustain always evolving users and customers' expectations

Appendices

Shareholder analysis

		Number of
Rank	Name	shares	%
1	Schibsted ASA	406 050 523	59,3%
2	Blommenholm Industrier AS	43 313 297	6,3%
3	Fidelity Management & Research Company	27 719 108	4,0%
4	Folketrygdfondet	22 974 563	3,4%
5	Baillie Gifford & Co.	17 442 647	2,5%
6	Capital World Investors	11 240 025	1,6%
7	York Capital Management L P.	10 124 503	1,5%
8	Adelphi Capital LLP	8 464 049	1,2%
9	Capital Guardian Trust Company	7 937 134	1,2%
10	The Vanguard Group, Inc.	7 249 846	1,1%
11	Alecta pensionsförsäkring, ömsesidigt	6 185 326	0,9%
12	Pelham Capital Ltd	6 117 429	0,9%
13	Citigroup Global Markets	5 884 365	0,9%
14	Goldman Sachs International	5 310 383	0,8%
15	Alfred Berg Kapitalforvaltning AS	4 245 466	0,6%
16	JPMorgan Chase Bank GTS CL A/C Escrow Account	4 216 128	0,6%
17	Alken Asset Management Ltd	4 134 046	0,6%
18	KLP Forsikring	3 964 787	0,6%
19	Mitsubishi UFJ Trust and Banking Corporation	3 680 014	0,5%
20	Storebrand Kapitalforvaltning AS	3 570 765	0,5%

Updated information and VPS register at:

https://adevinta.com/ir/shareholders/

The shareholder ID data are provided by Nasdaq OMX. The data are obtained through the analysis of beneficial ownership and fund manager information provided in replies to disclosure of ownership notices issued to all custodians on the Adevinta share register. Whilst every reasonable effort is made to verify all data, neither Nasdaq OMX or Adevinta can guarantee the accuracy of the analysis.

Basic information

	Adevinta share
Ticker
Oslo Stock Exchange:	ADE
Reuters:	ADE.OL
Bloomberg:	ADE:NO
Number of shares	684,948,502
Treasury shares (Feb 11, 2020)	0
Number of shares outstanding	684,948,502
Free float*	40.7%
Share price (Feb 11, 2020)	NOK 119.8
Average daily trading volume (shares)**	263,000
Market Cap total (Feb 11, 2020)	NOK 82.1bn (USD 8.9bn)

Investor information

Visit Adevinta's website www.adevinta.com

Adevinta ASA Akersgata 55, P.O. Box 490 Sentrum, E-mail: ir@adevinta.com

Marie de Scorbiac

ir@adevinta.com +336 1465 7740