Vend Marketplaces (VEND) Q4 2012 earnings summary

Executive summary

• Q4 operating revenue was NOK 3,811m, up 2% reported and 1% underlying; online classifieds grew 14% underlying as print declines and restructuring weighed on profitability.

• Q4 EBITDA was NOK 497m versus NOK 549m; excluding investment-phase classifieds, EBITDA was NOK 609m versus NOK 702m, with a 16% margin versus 19%.

• Full-year revenue was NOK 14,763m versus NOK 14,378m, and EBITDA was NOK 2,028m versus NOK 2,185m; impairment charges drove a Q4 operating loss of NOK 454m.

Financial highlights

• Q4 operating revenue was NOK 3,811m versus NOK 3,744m; EBITDA was NOK 497m versus NOK 549m, with a reported margin of 13% versus 15%.

• Q4 EBIT was a loss of NOK 454m versus profit of NOK 184m; net loss was NOK 474m versus profit of NOK 42m.

• Q4 reported EPS was NOK -4.55 versus NOK 0.32; adjusted EPS was NOK 2.42 versus NOK 2.14.

• FY EBITDA was NOK 2,028m versus NOK 2,185m and EBIT was NOK 744m versus NOK 1,439m; net profit was NOK 240m versus NOK 832m, with adjusted EPS of NOK 8.41 versus NOK 8.76.

Outlook and guidance

• Online classifieds is expected to deliver continued revenue growth and high margins, with stronger monetization anticipated in established markets including Subito.it, Willhaben.at and DoneDeal.ie.

• Investment activity and spending are expected to increase in 2013, focused on core markets and selected new geographies, including continued Blocket roll-outs.

• Print readership and advertising are expected to continue shifting online; digital advertising, particularly mobile, is expected to gain share.

• Digital transformation is expected to soften media-house margins; NOK 500m of cost measures are planned across Norway, Sweden and Spain over two years.