Vend Marketplaces (VEND) Q4 2014 earnings summary

Executive summary

• 2014 revenue rose 1% YoY to NOK 14,975m; EBITDA increased to NOK 1,941m from NOK 1,777m, while operating profit fell to NOK 510m and net loss was NOK 127m.

• Online classifieds strengthened results and increased to 54% of revenue and 62% of EBITDA; media houses faced continued print-advertising pressure.

• Strategic priorities for 2015: digital transformation, expansion and consolidation of classifieds positions, and heavier investment in shared technology and product platforms.

Financial highlights

• Revenue NOK 14,975m, up 1% YoY; operating expenses declined 1% reported, while EBITDA grew 9% to NOK 1,941m.

• Operating profit was NOK 510m vs NOK 1,675m; net loss NOK 127m vs profit NOK 1,037m, reflecting NOK 841m share of JV/associate losses and only NOK 8m other income vs NOK 647m.

• Operating cash flow increased to NOK 1,230m from NOK 716m; investing cash flow was NOK -1,580m, including NOK 835m invested in other shares, mainly loss-making JVs and associates.

• Adjusted EPS was NOK -1.46 vs NOK 3.90; reported EPS was NOK -1.67 vs NOK 9.43.

Outlook and guidance

• Established classifieds portfolio targets 15–20% annual revenue growth over the mid-to-long term; Blocket.se is expected to grow at a high single-digit rate in 2015 and Finn.no at a low single-digit rate.

• Classifieds investment-phase spending is expected to decline close to 50% in 2015 vs 2014 following the joint-venture agreement.

• 2015 central technology and product-development investment is expected at NOK 100–200m; media-house margins are expected to contract, with subscription papers at 0–10% and VG/Aftonbladet at 10–15%.