Adevinta reports further recovery in Q3

Adevinta ASA (ADE) , Published 27/10/2020 06:01:51

  • Agreement to acquire eBay Classifieds Group
  • Improving trends confirmed
  • EBITDA margin exceptionally high, driven by cost saving initiatives, delayed expenses and positive one-offs
  • Significant strategic developments in the current portfolio
  • Strengthened financial position 

Oslo, 27 October 2020 – Adevinta ASA (ADE) (“Adevinta” or “the Company”) completed its third quarter of 2020, ended 30 September, reporting a 1.6% year-on-year increase in revenues1, driven by positive organic growth in France and Brazil.

The recovery experienced in the second quarter continued into the third quarter, thus resulting in positive growth during each month of the quarter. Classifieds revenues were up 4.6% in the quarter, while display advertising revenues decreased 4.3%. L’Argus Groupe, acquired in October 2019, added 4.2 points to total revenue growth, but changes in exchange rate had a negative 2.6-point impact.

Gross operating profit (EBITDA) including JVs increased by 6% yoy. The negative impact of Covid-19 on Adevinta’s main markets was mitigated by strong cost reduction initiatives implemented throughout the group and favourable phasing, since some expected marketing expenses and hiring only started to ramp up at the end of the quarter.

In the quarter, the company announced that it had entered into a definitive agreement to acquire 100% of eBay Classifieds Group, the global classifieds arm of eBay Inc. Further, Adevinta received final approval by Brazil’s antitrust agency for OLX Brazil’s acquisition of Group ZAP in October, and announced the divestment of investment phase operations in Morocco, Tunisia, and Colombia.

Rolv Erik Ryssdal, CEO, commented: “I am truly excited that we reached in July an agreement to acquire eBay Classifieds Group. This transaction will create the world’s leading online classifieds company with the most diversified and complementary portfolio of marketplaces across the globe. Following the acquisition we will benefit from number 1 market positions across 17 countries, covering 1 billion people and we will be uniquely positioned to accelerate the growth and development of our markets. It will allow us to create more value in the years to come through the combination of best-in-class assets and expertise and through the generation of substantial and sustainable synergies.

As expected, Q3 performance confirmed the trend that we had seen throughout Q2, with improving momentum in operational KPIs, translating into revenues. We posted positive growth in the quarter. We continued to implement strong cost saving initiatives throughout the quarter and benefited from the phase-out of expenses, driving exceptional year-on-year growth in EBITDA margin despite the dilutive impact of acquisitions. We expect Q4 profitability to reflect the catch up and acceleration of investment in marketing and product and technology, while remaining confident in our longer-term EBITDA margin improvement potential. 

We see strong growth opportunities in the industry arising from accelerated digital consumer trends and increasing need for efficient online solutions. Our leading positions have been confirmed through the crisis. Strong client relationships and enhanced product offering will continue to support business development although the macro environment remains uncertain”.

Q3 2020 Highlights 

Agreement to acquire eBay Classifieds Group

  • Unprecedented-scale pure player in online classifieds with leading market positions
  • Combination of best-in-class assets and expertise
  • High synergy extraction potential with estimated €134-165m impact on EBITDA in year 

Improving trends confirmed 

  • Further recovery in operational KPIs 
  • Total revenues1 up 1.6% 
  • Positive organic growth in France (+8%) and Brazil (+4%) 
  • Online classifieds revenues1 increased 5% 
  • Display advertising revenue1 decreased 4%

EBITDA1 margin exceptionally high, driven by cost saving initiatives, delayed expenses and positive one-offs

  • Margin1 up 120bps yoy 
  • Improving margins in Brazil and Global Markets 
  • Lower HQ and other costs

Significant strategic developments in the current portfolio 

  • Final CADE approval received for Grupo Zap acquisition 
  • Further optimisation of Global Markets portfolio

Strengthened financial position 

  • Refinancing of Adevinta’s debt completed ahead of acquisitions 
  • Attractive financing conditions obtained 
  • Strong rating profile

Key financial numbers 

 Third quarter(€ million)YTD
yoy%20192020 20202019yoy%
2%180.3183.3Operating revenues incl. JVs527.0539.3-2%
6%54.157.1EBITDA incl. JVs142.2153.7-7%
 30%31%EBITDA margin incl. JVs27%28% 
       
   Operating revenues – segments   
17%85.7100.1France283.6255.911%
-7%45.341.9Spain121.3135.1-10%
-27%22.016.0Brazil48.862.8-22%
-9%40.937.1Global Markets106.4122.1-13%
   EBITDA – segments   
4%48.350.2France138.0141.6-3%
-7%16.014.8Spain39.444.2-11%
11%3.43.8Brazil10.81.2>100 %
-1%6.56.4Global Markets9.914.5-32%
   Cash flow   
-8%36.833.8Net cash flow from operating activities89.8107.7-17%

Invitation to the presentation of the Q3 2020 results

You are cordially invited to participate in the presentation of Adevinta ASA’s Q3 2020 report on Tuesday 27 October 2020.

Quarterly Earnings Release
When: 27 October 2020 at 07:00 CET
Report for the third quarter 2020, presentation materials, and spreadsheet with key figures and analytical information will be made available on the investor relations pages at https://www.adevinta.com/ir/.

Presentation of the Quarterly Results
When: 27 October 2020 at 08:30 CET

The company will conduct the presentation as a live audio webcast and conference call, including a Q&A session. CEO Rolv Erik Ryssdal and CFO Uvashni Raman will present. The whole management team of Adevinta will participate in the Q&A session.

The webcast will be available on www.adevinta.com/ir and on this link: https://bit.ly/3eaVBV4. Participants are also invited to ask questions using the dial-in numbers below.

Dial-in details:
Norway: +47 21 56 33 18
UK: +44 20 3003 2666
USA: +1 212 999 6659
Password: adevinta 

A recording of the presentation will be available on our website shortly after the live webcast has ended.

 Proportionate basis incl JVs For definition of EBITDA please see section Definitions and reconciliations. Adevinta implemented IFRS 16 from 1 January 2019

-End- 

Media contacts
Mélodie Laroche
Corporate Communications
T: +33 (0) 6 84 30 52 76
melodie.laroche@adevinta.com

IR contact
Marie de Scobiac
Head of Investor Relations
ir@adevinta.com

Edelman Smithfield
Adevinta@edelman.com 

About Adevinta
Adevinta is a global online classifieds specialist, operating digital marketplaces in 15 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 35 digital products and websites, attracting 1.5 billion average monthly visits. Leading brands include top-ranked leboncoin in France, InfoJobs and Milanuncios in Spain, and 50% of fast-growing OLX Brazil. Adevinta spun off from Schibsted ASA and publicly listed in Oslo, Norway in 2019. Adevinta is majority owned by Schibsted ASA and employs 4,700 people committed to supporting users and customers daily. Find out more at Adevinta.com.

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