Vend Marketplaces (VEND) Q4 2016 earnings summary

Executive summary

• FY16 revenue rose 5% to NOK 15,854m; reported EBITDA reached NOK 2,131m, while adjusted EPS was NOK 2.70 versus NOK 3.17 in 2015.

• Online classifieds growth and digital subscriptions supported performance, offsetting continued print-advertising pressure; over 70% of revenue came from digital services.

• Strategy centered on scaling classifieds, building digital media houses, and expanding shared product and technology capabilities.

Financial highlights

• Revenue was NOK 15,854m, up 5%; currency-adjusted growth was 3%.

• Operating expenses increased 5% to NOK 13,723m; EBITDA was NOK 2,131m versus NOK 2,016m, with a 13% margin in both years.

• Operating profit fell to NOK 1,237m from NOK 2,161m; profit before tax was NOK 1,258m versus NOK 1,966m, reflecting lower one-off gains and higher special items.

• Net income was NOK 559m versus NOK 1,391m; profit attributable to parent owners was NOK 465m versus NOK 1,263m.

• Operating cash flow improved to NOK 1,506m from NOK 993m; investing outflow was NOK 1,248m versus NOK 1,513m.

Outlook and guidance

• Online classifieds medium- to long-term annual revenue growth target remains 15–20%.

• FY17 classifieds investment is expected to fall significantly from EUR 93.6m in FY16; Brazil was expected to reach profitability during 2017.

• Spanish classifieds revenue growth was expected to accelerate in 2017 on product enhancements and better market conditions.

• Media houses planned continued digital product development and cost adaptation; persistent advertising trends could cause further margin contraction over the next 12 months.

• Product and technology investment was expected to increase somewhat in 2017, with efficiency benefits and reduced duplication targeted for 2018.