Vend Marketplaces (VEND) Q4 2011 earnings summary

Executive summary

• FY2011 revenue rose 4% to NOK 14,378m; underlying growth was 6%, led by online classifieds and digital advertising. EBITDA was NOK 2,185m, while operating profit fell to NOK 1,439m from NOK 3,410m.

• Mobile and digital use accelerated, while print circulation continued to decline; digital revenue exceeded one-third of total revenue.

Financial highlights

• Revenue NOK 14,378m vs NOK 13,768m; EBITDA NOK 2,185m vs NOK 2,199m; operating profit NOK 1,439m vs NOK 3,410m.

• Net income NOK 832m vs NOK 2,931m; EPS NOK 7.00 vs NOK 27.04; adjusted EPS NOK 8.76 vs NOK 9.72.

• Online ad revenue grew 18% underlying; print ad revenue declined 2%; single-copy revenue declined 7% underlying.

• Operating expenses increased 7% underlying; excluding NOK 412m of classifieds roll-out losses, underlying cost growth was below 5%.

Outlook and guidance

• Classifieds revenue and traffic expected to grow, with high margins; online classified expansion to continue at a high pace in 2012.

• 2012 classifieds roll-out investment, charged to EBITDA, expected at the same or slightly higher level than 2011.

• Scandinavian newspaper cost reductions of NOK 190–210m take effect over 2012–2014, with most impact in 2012; planned headcount reduction of 160–200.

• Continued mobile growth and digital payment development expected; single-copy circulation likely to decline, with subscription circulation slightly lower.