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Adevinta — Earnings Release 2021
Jul 15, 2021
3520_iss_2021-07-15_ebf61d9c-a9ec-4a44-a8e2-c6075484c86b.html
Earnings Release
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Adevinta ASA (ADE) - Adevinta reports further recovery in Q2, presents the new Group structure
Adevinta ASA (ADE) - Adevinta reports further recovery in Q2, presents the new Group structure
* Total revenues up 36% yoy at EUR213m
* Organic revenue growth of 36% vs Q2 2020 (+15% vs Q2 2019)
* EBITDA(1) up 24% year-on-year to EUR52m
* Acquisition of eBay Classifieds Group completed
* Disposal of Shpock completed and sale process for remaining UK assets
ongoing
* Management to present some key assets and market opportunities
Oslo, 15 July 2021 - Adevinta ASA (ADE) ("Adevinta" or "the Company") reported
total revenues(1) of EUR213 million, up 36% in Q2 compared to the same period last
year. Organic revenue growth(2) stood at 36% year-on-year, and at 15% compared
to Q2 2019, demonstrating further recovery across the board.
Online classifieds revenues improved by 39% (of which 6% is attributable to
transactional services) compared to Q2 2020, which was strongly impacted by the
Covid-19 crisis. Display advertising revenues increased 35% year-on-year.
Disposals in Global Markets and the Grupo Zap acquisition had a 0.6 point
positive impact on revenue growth, whilst changes in exchange rate contributed
negatively with 0.4 points.
Gross operating profit (EBITDA) including JVs increased 24% compared to Q2 2020
(+5% compared to Q2 2019). Revenue growth and benefit from divestments were
partially offset by the negative one-off of ESOP costs in Brazil, as well as by
strong marketing investment in France, increase in personnel costs in the
absence of government subsidies, and ramp-up of transactional services.
Rolv Erik Ryssdal, CEO, commented:
"Our strong sales performance in Q2, with 36% organic revenue growth, confirms
the recovery momentum observed over the past quarters, as we also benefited from
the gradual lifting of restrictions in all of our key markets. In the quarter,
we have increased our EBITDA margin, excluding one-off in Brazil, despite the
significant acceleration in marketing and talent acquisition investments. We
will continue to ramp up these investments in the second half of the year to
reinforce our positions and seize market opportunities.
"On 25 June, we completed the acquisition of eBay Classifieds Group, a game-
changing transaction for Adevinta, making us the world's leading online
classifieds group with a diversified and complementary portfolio of assets and
brands. We are now starting an incredibly exciting new chapter for our business,
supported by our talented people, a new Executive team and a committed Board of
Directors.
"We have already initiated our strategic review and, following the positive
conversations we have had thus far, we are confident about the opportunities
that we see in combining the strengths and expertise of both groups. We will
unveil the strategy and the financial objectives for the New Adevinta during our
next Capital Markets Day, to be held on 30 November 2021."
Q2 2021 Highlights
Further recovery in revenues
* Total revenues up 36% yoy at EUR213m
* Organic growth of 36% yoy (+15% vs Q2 2019)
* Online classifieds revenues(1) up 39% yoy (of which 6% from transactional
services)
* Display advertising revenues(1) up 35% yoy
EBITDA(1) up 24% yoy to EUR52m
* Top line growth
* Benefit from divestments
* Partially offset by strong marketing investment which more than doubled vs
Q2 2020
* Increase in personnel costs (one-off benefits in Q2 2020 related to Covid-
19 temporary redundancy support and expected ramp-up in hirings)
* Increase in transactional costs due to the ramp-up of the service
* One-off impact of ESOP in Brazil
Acquisition of eBay Classifieds Group completed on 25 June 2021
* Creation of a globally scaled, pure-play online classifieds leader with a
diversified and complementary portfolio of assets and brands
* New Executive team to drive forward Adevinta's long term strategy and
ambitions
Disposal of Shpock completed and sale process for remaining UK assets ongoing
* Sale of Shpock completed on 2 June 2021
* Active engagement on the Gumtree UK and Motors.co.uk sales process
Q2 2021 trading update
Commentary and financial numbers in the following section of this document
refers to proportionate numbers including JVs.
Adevinta Overview
+-----+------------+------------------------------+----------------+
| | Second |(EUR million) | |
| | quarter | | YTD |
+-----+-----+------+------------------------------+-----+-----+----+
|yoy% |2020 | 2021 |ADEVINTA |2021 |2020 |yoy%|
+-----+-----+------+------------------------------+-----+-----+----+
| 33%| 145| 193|Operating revenues | 375| 320| 17%|
+-----+-----+------+------------------------------+-----+-----+----+
| 86%| 11| 20|Proportional revenues from JVs| 38| 24| 56%|
+-----+-----+------+------------------------------+-----+-----+----+
| 36%| 156| 213|Operating revenues incl. JVs | 413| 344| 20%|
+-----+-----+------+------------------------------+-----+-----+----+
| | | | | | | |
+-----+-----+------+------------------------------+-----+-----+----+
| 37%| 39| 53|EBITDA | 106| 79| 34%|
+-----+-----+------+------------------------------+-----+-----+----+
| |26.6%| 27.4%|EBITDA margin |28.2%|24.6%| |
+-----+-----+------+------------------------------+-----+-----+----+
|-109%| 4| (0)|Proportional EBITDA from JVs | 3| 6|-45%|
+-----+-----+------+------------------------------+-----+-----+----+
| 24%| 42| 52|EBITDA incl. JVs | 109| 85| 28%|
+-----+-----+------+------------------------------+-----+-----+----+
| |27.3%| 24.7%|EBITDA margin incl. JVs |26.5%|24.7%| |
+-----+-----+------+------------------------------+-----+-----+----+
Operating revenues incl. JVs by category
+------------------------------+----------------+-------------+
| | Second quarter | YTD |
+------------------------------+------+---------+------+------+
| EUR million | 2021 | 2020 | 2021 | 2020 |
+------------------------------+------+---------+------+------+
| Advertising revenues | 35 | 26 | 67 | 57 |
+------------------------------+------+---------+------+------+
| Classifieds revenues* | 177 | 127 | 344 | 282 |
+------------------------------+------+---------+------+------+
| Other operating revenues | 1 | 3 | 2 | 5 |
+------------------------------+------+---------+------+------+
| Operating revenues incl. JVs | 213 | 156 | 413 | 344 |
+------------------------------+------+---------+------+------+
*Classifieds revenues include transactional revenues for EUR11 million in Q2 2021
and EUR4 million in Q2 2020.
France
+------+----------------+--------------------+----------------------+
| | Second quarter | (EUR million) | YTD |
+------+-------+--------+--------------------+-------+-------+------+
| yoy% | 2020 | 2021 | France | 2021 | 2020 | yoy% |
+------+-------+--------+--------------------+-------+-------+------+
| 36% | 86 | 117 | Operating revenues | 228 | 184 | 24% |
+------+-------+--------+--------------------+-------+-------+------+
| 40% | 45 | 63 | Operating expenses | 119 | 96 | 25% |
+------+-------+--------+--------------------+-------+-------+------+
| 31% | 41 | 54 | EBITDA | 109 | 88 | 24% |
+------+-------+--------+--------------------+-------+-------+------+
| | 47.5% | 46.0% | EBITDA margin | 47.7% | 47.8% | |
+------+-------+--------+--------------------+-------+-------+------+
Revenues in France grew by 36% in the second quarter and 32% compared to the
second quarter of 2019 (including contribution from L'Argus) demonstrating rapid
recovery as Covid-19 restrictions eased progressively in the quarter. Total
classifieds revenues grew 35% compared to last year (of which 9% attributable to
transactional services) and 41% compared to Q2 2019 (including contribution from
l'Argus). We continued to see solid growth throughout the second quarter
especially in the motor and real estate verticals, primarily driven by positive
ARPA development. Holidays rental vertical improved significantly as a
consequence of the relaxation of mobility restrictions. Advertising revenue grew
46% year-on-year and is now nearly in line with 2019 figures.
EBITDA margin softened to 46.0% despite revenue growth mainly due to strong
marketing investment done in the second quarter, which doubled compared to low
levels in Q2 2020, as a result of extensive campaigns to celebrate the 15th
anniversary of Leboncoin and to promote transactional services. The increasing
share of transactional services (contributing to gross profits, albeit at lower
relative margin) as well as the expected increase in personnel costs due to the
ramp-up in hiring and the non recurring benefit from Covid-19 temporary
redundancy support measures in 2020, also impacted negatively the margin
performance.
Traffic continued to show good growth (+16% year-on-year) especially during the
first half of the quarter while a slight deceleration was noticed in June mainly
driven by external factors such as the end of third lockdown. New ads and leads
experienced a similar trend.
In Q2 we continued to accelerate the P2P transactional solution with pricing
strategy on shipping and a new scoring ranking test on listing. Our payment
solution for cars continued to scale with an automated payment for used cars
sellers. We reinforced security and trust introducing authentication (sms) and
we continued to improve the user experience. We remained focused on our market
verticalization strategy in Real Estate (new listing, land surface indication,
local information on maps...), Motors (new listings for cars, criterias..) and
Holiday Rentals (sms booking approval for hosts, improved calendar?).
Spain
+------+----------------+--------------------+----------------------+
| | Second quarter | (EUR million) | YTD |
+------+-------+--------+--------------------+-------+-------+------+
| yoy% | 2020 | 2021 | Spain | 2021 | 2020 | yoy% |
+------+-------+--------+--------------------+-------+-------+------+
| 45% | 33 | 48 | Operating revenues | 92 | 79 | 15% |
+------+-------+--------+--------------------+-------+-------+------+
| 45% | 22 | 32 | Operating expenses | 63 | 55 | 15% |
+------+-------+--------+--------------------+-------+-------+------+
| 46% | 11 | 16 | EBITDA | 29 | 25 | 17% |
+------+-------+--------+--------------------+-------+-------+------+
| | 32.8% | 33.0% | EBITDA margin | 31.3% | 30.9% | |
+------+-------+--------+--------------------+-------+-------+------+
Revenues in Spain grew by 45% compared to Q2 2020 and by 4% compared to Q2
2019, now above pre-covid levels and hitting an all time high quarterly level.
Classifieds revenues were up 45% compared to Q2 2020 and 5% compared to Q2 2019
demonstrating a strong recovery in the verticals. We observed significant growth
in cars revenue, also growing at double digit compared to Q2 2019, fueled by the
combination of higher dealer penetration in both large clients and through
Milanuncios, and higher ARPD. The real estate market continued to recover in
terms of the number of house transactions, very close to 2019 levels at the end
of May. We saw significant recovery in jobs revenue despite the still weak
underlying market, benefiting from the digitalisation of Small Medium Businesses
in Spain.
Display advertising grew 45% year-on-year led by the increase in direct sales
and was broadly in line with Q2 2019.
The EBITDA margin in Q2 was slightly above Q2 2020 at 33.0%, as the revenues
increase was partly offset by the reactivation of marketing spending and the
increase in personnel costs, no longer benefiting from the temporary redundancy
in the context of covid-19, in order to support and boost our market positions.
We expect investment to further increase in the second half as a result of the
increasingly competitive environment
We saw traffic down by 3% year-on-year in Q2, negatively impacted by the new way
of measuring following the implementation of the new cookie policies and by
strong competition in our generalist brand. This was partially offset by traffic
growth in our motor and real estate marketplaces. On the other hand, leads were
up 15% and private content grew by 2% in Q2 with all sites showing positive
growth.
In Q2, in Fotocasa we launched the express visit feature that enables users to
have a 3D video call with the agencies, the Google one tap log-in and the Geo
advisor, which will bring traffic growth. In Jobs we developed a multi
publishing product between InfoJobs and Milanuncios, we launched the salary
calculator and enabled the curriculum vitae multi format upload. In Motor, we
launched the price drop notification, unified categories in app and web and
started the migration of our professional clients to the new responsive site. We
improved content sharing between Milanuncios and Coches.net and developed a car
photo autocomplete using machine learning in Milanuncios. Besides, we continued
improving our Payment & Delivery solution by the buy button in the price list
and by opening transactional to big items.
Brazil
+-------+----------------+--------------------+----------------------+
| | Second quarter | (EUR million) | YTD |
+-------+-------+--------+--------------------+------+-------+-------+
| yoy% | 2020 | 2021 | Brazil | 2021 | 2020 | yoy% |
+-------+-------+--------+--------------------+------+-------+-------+
| >100% | 13 | 30 | Operating revenues | 57 | 33 | 73% |
+-------+-------+--------+--------------------+------+-------+-------+
| >100% | 9 | 33 | Operating expenses | 56 | 26 | >100% |
+-------+-------+--------+--------------------+------+-------+-------+
| -175% | 5 | (3) | EBITDA | 1 | 7 | -84% |
+-------+-------+--------+--------------------+------+-------+-------+
| | 34.1% | -11.4% | EBITDA margin | 1.9% | 21.4% | |
+-------+-------+--------+--------------------+------+-------+-------+
OLX Brazil revenues and EBITDA are included on a 100% basis for both periods.
We continued to observe depreciation of brazilian real against euro compared to
Q2 2020 impacting revenue growth, but to a lesser extent than in previous
quarters. Operational revenue in the Brazil segment increased by 141% in local
currency driven by the acquisition of Grupo ZAP in Q4 2020.
OLX.com.br in Brazil, which is a 50% owned joint venture, increased revenue by
148% year-on-year in local currency, including the contribution from Grupo Zap.
On a comparable basis, revenues grew 47% year-on-year and by 32% compared to Q2
2019. Classified revenues were up 44% compared to Q2 2020 led by core motor and
real estate verticals, as well as by high conversion in Consumer Goods. We saw
strong performance in cars revenues driven by price optimizations in the
professional sales offering and significant growth in paying listers in the
private segment. We continued to observe strong growth in real estate due to the
cross-selling strategy with Grupo ZAP and the gradual roll-out of the triple
bundle ZAP / Vivareal / OLX, strengthening our position in the brokers segment.
Display advertising grew 41% compared to Q2 2020 on a comparable basis, driven
by solid performance in indirect advertising. Transactional revenues continued
to grow at double digit quarter-on-quarter.
Infojobs.com.br in Brazil increased its operational revenues by +50% in local
currency and by 16% compared to Q2 2019 mainly led by classifieds revenue and to
a lesser extent by advertising. We continued to see steady growth in the main
operational KPIs during the second quarter of the year.
In Q2, cumulative EBITDA decreased by EUR8 million when compared to Q2 2020,
negatively impacted by the EUR14 million increase of the management long-term
incentive in OLX Brazil. On a comparable basis, excluding Grupo ZAP and this
one-off impact, EBITDA margin would have seen an increase of 8 percentage points
compared to Q2 2020, as a result of the classified revenues performance. We
continued to invest in talent and reactivated the marketing spending.
We observed a soft performance in traffic and leads when compared to Q2 2020,
impacted by the strong rise in both metrics after the full lockdown last year.
On the other hand, we saw a significant boost in supply in all verticals,
benefiting from new initiatives to increase paying listers.
In Q2 we gradually rolled-out the triple bundle ZAP / Vivareal / OLX for
existing clients. In motor, we continued the digitalization of the car journey
with the launch of the vehicle history feature and improved car financing and
insurance services. We improved scalability, automation and fraud in our Payment
& Delivery solution.
Global Markets
+------+----------------+--------------------+--------------------+
| | Second quarter | (EUR million) | YTD |
+------+------+---------+--------------------+------+------+------+
| yoy% | 2020 | 2021 | Global Markets | 2021 | 2020 | yoy% |
+------+------+---------+--------------------+------+------+------+
| 19% | 32 | 38 | Operating revenues | 74 | 69 | 7% |
+------+------+---------+--------------------+------+------+------+
| 18% | 31 | 36 | Operating expenses | 68 | 66 | 4% |
+------+------+---------+--------------------+------+------+------+
| 40% | 2 | 2 | EBITDA | 5 | 3 | 57% |
+------+------+---------+--------------------+------+------+------+
| | 4.8% | 5.6% | EBITDA margin | 7.4% | 5.1% | |
+------+------+---------+--------------------+------+------+------+
Willhaben revenues and EBITDA are included on a 100% basis for both periods.
Shpock operations included until divestment on June 2, 2021.
The Global Markets portfolio saw positive reported revenue growth of 19%
compared to Q2 2020. Excluding disposals, revenue grew 34% with strong
performance in the main markets throughout the quarter led by Ireland, Italy and
Willhaben. Classified revenues (including transactional revenues) were up 29%
year-on-year excluding disposals. Revenues in advertising were also up 44%
excluding disposals.
Q2 2021 EBITDA was up +0.9pp year-on-year landing at EUR2 million benefiting from
the divestment of assets. Total revenue of disposed assets amounted to EUR0.9
million in Q2 2021 (EUR4.3 million in Q2 2020) and EBITDA totalled EUR(3.2) million
(EUR(3.6) million in Q2 2020).
Q2 2021 EBITDA margin excluding disposals would be 14.5% showing a decrease of
4 percentage points year-on-year driven by Italy, due to the acceleration of
marketing and P&T investments, and Willhaben, due to higher personnel costs, no
longer benefiting from the government grants received last year and by
unfavourable phasing of marketing. This was partly offset by EBITDA increase in
Ireland when compared to Q2 2020 fuelled by revenues outperformance.
In Italy, we saw a continuation of the operational KPIs good trends in the last
quarters. Traffic and content have grown double digit compared to last year for
the whole quarter, with a slight deceleration in the last part of the quarter in
line with market trends as restrictions were lifted. In Motor we continue to
gain market share in content and dealers. Jobs has experienced a nice recovery
growing double digit compared to last year. Advertising performed well with a
good uplift in programmatic driven by strong traffic development and
improvements in our Tech stack. We have continued evolving the transactional
experience adding the missing pieces: shipping, one-click buy, user ratings,
etc.
Willhaben continued its solid development in all operational metrics and the
strong performance in all revenue streams. Paylivery, the peer-to-peer payment
and delivery service, continued to gain traction and scale with optimizations in
the funnel to improve conversion rates. Encouraging development in the Jobs
vertical confirmed the positive signs already observed at the end of Q1.
In Ireland we saw good traction in our mortgage business together with a
continuous strong growth in Multi Unit Rental in Daft. In motors, DoneDeal has
significantly improved its average revenue per dealership driven by upselling
and product improvements. We also experienced solid performance in Advertising
partly as a result of traffic numbers increasing in all categories.
In Hungary, our product and tech improvements are starting to deliver results as
we saw a significant increase in the penetration and the use of our apps. We
also noted a strong recovery in the Jobs category which was heavily impacted by
Covid last year. Private motor content and revenues, on the other hand, are
still suffering from the effects of the pandemic while we continue to grow well
on the professional side in Hasznaltauto.
During Q2 we finalised the divestment of Shpock, which was sold to Russ Media on
June 2nd, 2021 to address the UK regulator's competition requirements in the
context of Adevinta's acquisition of eBay Classifieds Group.
Other and Headquarters
Other and Headquarters costs comprise Adevinta's shareholder and central
functions including central product and technology development.
The Other and Headquarters segment's EBITDA decreased by 4.5 million euros year-
on-year, to (16.1) million euros in Q2 2021 but remained at similar levels than
Q1 2021. The variation compared to Q2 2020 is mainly due to higher personnel-
related costs as a consequence of the run rate impact due to the increasing
number of employees as we continue to set-up corporate functions. The increase
is also impacted by last year's one-off positive contribution through the
recognition of government grants as R&D credits as well as some H1 2020 one-off
costs reallocated into transition costs in Q2 2020.
Alternative performance measures (APM) used in this press release wil be
described and presented in the Definitions and Reconciliations section at the
end of the Q2 2021 interim report, to be published on 30 August 2021.
Outlook
We see an acceleration of the trends that support the development of the digital
economy and the emergence of new business models. Strong secular shifts in
online behavior and changing consumption patterns are driving expectations for
more convenient user digital journeys. Professionals are rethinking the way they
operate and are in demand for more efficient and digital content advertising
solutions. The new Adevinta enjoys unequalled positions in vertical and
horizontal classifieds marketplaces, with highly complementary skills and
expertise and unique global scale to accelerate innovation. We are in an ideal
position to continue to lead in the sector, to facilitate and enhance our user
and customer experience in their digitalization journey and to benefit from the
ongoing industry transformation. Sustainable growth opportunities will stem from
further monetization in our existing markets, driving inherent operational
leverage. In addition, our expansion throughout the transactional value chain
will continue to enlarge our addressable market and represents a substantial
incremental growth opportunity.
We saw further recovery across the board in the second quarter and we expect
positive momentum to continue through the rest of 2021 albeit that volumes
remain soft and uncertain in some of our markets in the short term. Now that the
eCG acquisition is completed, we have entered the execution phase. Our key
priority will be to deliver on the synergy target that we announced in July
2020. At the same time we will keep a strong focus on our operations. As the
vaccine roll-out progresses, we see restrictions reducing, therefore we expect
work conditions to progressively normalise in the second half. We will continue
to invest in the business to reinforce our positions and seize market
opportunities in classifieds. We will even accelerate in markets where we face
increasing competition. Our combined group strategic and financial objectives
will be communicated in a Capital Markets Day which will be held on November
30, 2021.
Presentation of the Q2 2021 trading update
Time: 15 July 2021 2021 at 14:00 CEST
The company will conduct the presentation as a live audio webcast and conference
call. This will also be the opportunity to comment further on the recently-
closed eBay Classifieds Group transaction. The whole new Adevinta Executive team
will participate in the event.
The webcast will be available on www.adevinta.com/ir
(http://www.adevinta.com/ir) and on this link: https://edge.media-
server.com/mmc/p/enpou7ao. Participants are also invited to ask questions using
the dial-in numbers below.
Dial-in details:
Norway: +47 23 96 0 264
UK: +44 (0) 207 192 8000
USA: +1 631 510 74 95
Confirmation code: 2540506
A recording of the presentation will be available on our website shortly after
the live webcast has ended.
-End-
Media contacts
Mélodie Laroche
Corporate Communications
T: +33 (0) 6 84 30 52 76
[email protected] (mailto:[email protected])
Edelman Smithfield
IR contact
Marie de Scobiac
Head of Investor Relations
[email protected] (mailto:[email protected])
Anne-Sophie Jugean
Investor Relations Manager
+33 6 74 19 22 81
[email protected] (mailto:[email protected])
(mailto:[email protected])
(mailto:[email protected])
(mailto:[email protected])About Adevinta
Adevinta is a global online classifieds specialist, operating digital
marketplaces in 16 countries. The company provides technology-based services to
connect buyers with sellers and to facilitate transactions, from job offers to
real estate, cars, consumer goods and more. Adevinta's portfolio spans more than
40 digital brands, covering one billion people and attracting approximately
three billion average monthly visits. Leading brands include top-ranked
leboncoin in France, Germany's leading classifieds sites mobile.de and eBay
Kleinanzeigen, Marktplaats in the Netherlands, Kijiji in Canada, fotocasa and
InfoJobs in Spain, and 50% of fast-growing OLX Brasil. Adevinta spun off from
Schibsted ASA and publicly listed in Oslo, Norway in 2019. Adevinta employs
almost 7,000 people committed to supporting users and customers daily. Find out
more at Adevinta.com (http://www.adevinta.com).
***
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act