Vend Marketplaces (VEND) Q1 2012 earnings summary

Executive summary

• Underlying revenue grew 5% YoY to NOK 3,603m; EBITDA was NOK 421m versus NOK 439m in Q1 2011.

• Online businesses generated 37% of revenue and 61% of EBITDA, excluding headquarters.

• Digital classifieds and media gains offset weaker print advertising and pressure on Spanish operations.

Financial highlights

• Operating profit was NOK 344m versus NOK 318m; net income was NOK 201m versus NOK 194m, and EPS was NOK 1.78 versus NOK 1.53.

• Adjusted EPS was NOK 1.41 in both periods; EBITDA excluding expensed online-classifieds growth initiatives was NOK 561m versus NOK 509m.

• Online classifieds revenue rose 19% to NOK 871m; EBITDA margin was 26% versus 31%, reflecting investment in growth opportunities.

• Classifieds investment expense rose to NOK 141m from NOK 70m; Q1 spending exceeded the average pace required for the NOK 500m full-year target.

Outlook and guidance

• Online classifieds expected to maintain strong growth and high margins; Italy and Austria were expected to contribute positively to 2012 EBITDA.

• Planned investment in new classifieds markets totaled NOK 500m for 2012, charged to EBITDA.

• Print advertising faced a challenging start to Q2; print circulation pressure was expected to continue, with higher prices supporting 2012 results.

• Cost-reduction programs targeted annual savings of NOK 190–210m, with main effects in 2012 and implementation ahead of plan.