Adevinta ASA
OSE:ADE
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
112
115
|
| Price Target |
|
We'll email you a reminder when the closing price reaches NOK.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Adevinta ASA
You don't have any saved screeners yet
Welcome, everyone, to Adevinta's Q1 2022 Results Presentation. Mr. Rolv Erik Ryssdal, CEO of Adevinta, will host today's conference. Mr. Ryssdal, the floor is yours.
Thank you, operator. Good morning, everyone. Welcome, and thank you for joining today's presentation of our Q1 results. I have the pleasure to host the call out of Oslo together with Uvashni, Antoine and Gianpa and the whole [ Ad Ex ] team of Adevinta is also on the line.
I'm very pleased to welcome Alex, our new CPTO, for the first time in the results call. I also wanted to use this opportunity to thank Renaud for his immense contribution as interim CPTO until Alex was appointed and his ongoing support.
Together with Uvashni, I will take you through the main highlights of the quarter, the progress we made on the execution of our Growing at Scale strategy and our financial performance and outlook. Then all of [ Ad Ex ] will join us for the Q&A session.
Before we start, I would like to give some explanation of our reporting date and why since the publication of our Q3 results we've been releasing our results later than we used to. This is because of the eCG integration and the ongoing transition to major reporting systems. With time, we aim at reducing our reporting deadline. This will happen when system teams and internal processes are in place and proven.
Right, I'll not go through the disclaimer. I'll invite you to read it, and we'll start with the key highlights of the quarter.
On this slide, just a quick reminder of our vision for Adevinta that we presented at the Capital Markets Day in November. We are focusing our portfolio and our investments in the 5 European markets, which hold the greatest potential: France, Germany, Spain, Benelux and Italy. We will give a strong focus on growth value levers in core markets. Here, I'm specifically referring to our core verticals, Motors and Real Estate, as well as the fast-growing transactional services. We'll also continue to transform advertising by investing in our first-party products and proprietary capabilities in order to preserve revenues. We will leverage technology and expertise at scale. This will generate significant synergies. Lastly, we'll continue to consolidate the industry in our core markets.
In Q1, we made strong progress in the execution of our road map, portfolio optimization and integration. We are on track to deliver our synergy targets. We also continued to execute on our strategic goals. We successfully carried down our monetization journey in Motors and Real Estate, and we continued to scale our transactional services. We also continued to adapt our advertising business to the evolving environment. I will dig into those in the following slides.
As anticipated, our first quarter performance follows the trend that we observed at the end of last year, delivering a solid 6% revenue growth in a challenging environment and an underlying EBITDA margin of 35.3%. We have a solid balance sheet and strong cash generation profile. And to sum up, we're on track on the -- to achieve our financial targets for this and for the longer term.
Now on the next slide, you can see that our portfolio optimization is progressing at pace. We sold InfoJobs in Brazil in March and we closed the sale of Kufar in Belarus actually last week, last Friday. We are today announcing the divestment of Mexico, and we expect to reach an agreement on the sale of Australia and South Africa by the end of the third quarter.
Regarding the 2 remaining assets on the strategic review, Canada and Hungary, we continue to assess the options and we expect to come to a decision by the end of the year.
On the next slide, I will not go into the details on this slide. It's quite busy. But what you can see is that we have a solid integration road map to reach our synergy targets and we have already made good progress on it. Uvashni will discuss this in more detail later in the presentation, but I wanted to emphasize that at the end of the first quarter, we have already executed around 75% of our targeted run rate synergies for 2022. This means that concrete actions needed to achieve 75% over '22 targets have already been implemented, although they will have actual EBITDA impact later in the year. This makes us confident that we can achieve a run rate EBITDA synergy target of EUR 35 million in 2022 and EUR 130 million in year 3.
Moving on to the operational performance, I will focus first on traffic, a key indicator in our industry. Given the external factors that affected our KPIs in the last couple of years, we've covered the Ukraine war regulatory changes, we thought it would be useful to show you the long-term evolution. Both leboncoin and eBay Kleinanzeigen showed an impressive performance with visits being up more than 30% compared to Q1 2019. This demonstrates the strength of both brands. In mobile, although the brand is as strong as its market, it is inevitably impacted by the motor market environment, temporarily weaker, but we believe the potential remains intact and we continue to increase our market share.
Now let's dig into our core verticals, starting with Motors. The industry is going through an unprecedented, though temporary situation that arise from the global chip supply crisis. This is a direct consequence of the lack of inventory and has direct knock-on effects on the used car market and professional listings. It has, of course, an impact on used car market and on dealer listing volumes on the marketplaces. In France, they are down 10% in Q1 and in Germany they're down 27% year-on-year, approximately in the same proportions in the last quarter. This is a temporary impact and we continue to believe that it will be unwinded.
Market specialists planned for recovery in car sales in the core markets in 2022 as outlined on this slide. This recovery will be back end-loaded in 2022 with a strong acceleration, we believe, expect in '23. In the meantime, we're able to mitigate those temporary headwinds through our own initiatives.
In France and Germany, we hold #1 market positions and we continue to gain market shares. Our competitive advantage in mobile is even stronger year-on-year when we compare our deal listings and web visits to our main competitors. Our strong market positions demonstrate the quality of our solutions for car dealers and legitimize price increases that allow us to mitigate the short-term volume effect.
In mobile, the average revenue listings -- pro listing increased by 28% year-on-year, thanks to the successful 14% listing price increase that was implemented in August, together with other initiatives such as tier pricing mechanism and upselling our products.
We also, in April 1 this year, successfully implemented the new pricing adjustments which includes the dealer price increase and the car value factor and which will have a positive impact on our average revenue per lead evolution as from second quarter this year.
At leboncoin, we increased average revenue per dealer by 15% year-on-year. In France and in our other core markets, we intend to continue our monetization journey, along with further product development.
Let me also emphasize that the car industry is a healthy industry. We're seeing record profits both for OEMs and for dealers. They will need effective marketplaces going forward. There are 3 levers for us to increase our yields. It's either through price increases, upsell products or new product innovation, and we're working on all 3 of those.
In mobile, we acquired Null-Leasing in March after a successful market test at the end of '21. This acquisition will enable mobile expand its product and services offering in line with Adevinta strategy.
We scaled our C2B proposition with the launch in the quarter of our lead generation offer at leboncoin, but also Marktplaats. This product will enable dealers to purchase cars directly from customers. This is very valuable, especially in the context of shortages.
We also continued to bring added value for our clients. For example, in Spain, we launched in the quarter a multi-province product, which allows dealers to publish content in different provinces at the same time.
In Real Estate, volume-wise, our situation is different in France and in Germany, where we hold different market positions. In France, we see listings declining year-on-year under the effect of supply pressure and very strong demand. However, we continued to improve our monetization. We increased ARPA by 14% year-on-year, thanks to good performance of subscription packages with high added value for professional clients.
In Germany, professional listings are up 12% year-on-year, reflecting our gains in market share and increased agent penetration. We still have a lot of room to grow here, and we're making sure that we continue to bring further value to agents, ultimately leading to increased monetization as well, as illustrated in our next slide.
In leboncoin, we continued to deploy our market verticalization strategy with the ongoing development of rental management offer, the development of virtual visits for new constructions, for example. We continued to develop added value products for our customers in all our markets as well, such as a new valuation tool in Spain, while we continue to improve the user experience. At eBay Kleinanzeigen, we developed dynamic map for all real estate categories.
Moving on to transactional services, we continued to see strong traction in the adoption of the product. I will illustrate this with 2 relevant examples, leboncoin and Kleinanzeigen, where we see continued growth in numbers of transactions with, respectively, 40% and more than 210% compared to the same period 1 year ago. This is a growth opportunity, a very important one, and also contributes to the vibrancy of all of our platforms.
During the quarter, we established a transactional transformation team to drive transaction efforts jointly across markets. This team and marketplaces have already agreed on immediate priorities and collaboration areas to boost the transactional growth this year.
We continued and will continue to scale and launch new products. The promotion of our new products will be supported by marketing campaigns, for example, in Germany.
To give you some examples of our product launches, we launched a pilot for our wallet and split payment solution at leboncoin at the end of the second quarter. We're also launching our buy now, pay later solution in partnership with Klarna. And we are scaling our shipping solution in Germany.
In Benelux, we're enhancing our services in buyer protection, including escrow and shipping solution. As you can see, we're rapidly scaling our solutions in the different marketplaces, benefiting from our European scale and expertise.
Moving on to the advertising business, which is currently challenged by an overall weaker advertising market, especially in automotive display advertising. We're transforming to adapt to this environment. We're investing in our first-party products and proprietary capabilities. For example, we're currently developing first-party retail media proposition for eBay Kleinanzeigen financing. We're also investing to preserve revenue by adding head count to drive direct display in Germany and also developing new products, new formats and by rolling out AdSense across legacy Adevinta markets.
I will now hand over to Uvashni for the financial performance section.
Thanks, Rolv Erik, and good morning all. As Rolv Erik mentioned earlier, we delivered a solid financial performance for the quarter where we saw trends in line with the last quarter and also demonstrated a progressive improvement through to Q1 2022. When compared to last year, there have been a few changes in our portfolio. So let me walk you through the revenue buildup.
From left to right on the slide, you see the 2021 combined numbers at EUR 368 million. What this includes is revenue from continued operations. We exclude revenue from Australia and South Africa here as we now disclose them and account for them as discontinued operations. To get to a fully comparable set of numbers, we also then adjust the revenue for those markets we exited in 2021, which were Chile and Shpock. This brings us to a restated Q1 of 2021 of EUR 366 million.
In Q1 2022, EUR 387 million revenue show a 6% increase. Classified revenues grew 7% year-on-year, demonstrating the resilience of our business and the strength of our market positions.
We continued to implement solutions with new features and drive user adoption in transactional where we saw revenues grow 41% year-on-year. This was slightly offset by advertising revenue, which reflected the current software market and lower OEM spend.
Moving on to EBITDA. To be consistent and comparable with industry peers, we also -- and to demonstrate our underlying performance, we in Q1 -- in Q4 introduced a new KPI underlying EBITDA. What this does is shows consolidated EBITDA before charges for share-based compensation.
These different views can be confusing, so let me walk you through that. When we talk about our core markets, we include Spain, Germany, Italy, Benelux and France. We then add on other continued operations. Here, we include our JV Ireland, which we fully consolidate; Canada and Hungary; and then, of course, Mexico, InfoJobs and Belarus. We just effectively announced the divestment of Mexico and Belarus, which going forward will not be included.
Our reported EBITDA and underlying EBITDA do not include our nonconsolidated JVs and our discontinued operations, Australia and South Africa. As a result, our EBITDA from continued operations, which is our reported EBITDA includes EUR 125 million. Then you have the share-based compensation of EUR 12 million, which takes you to an underlying EBITDA of EUR 137 million. EUR 120 million of that comes from our core markets and EUR 17 million from our other continued operations.
If I then take you through the actual impact and walk through what impacted our EBITDA for 2022 Q1. We saw an impact of EUR 19 million higher on revenue, that's 6% increase, but this was offset slightly by personnel costs. Now personnel costs of EUR 22 million, let me give you a brief idea of that. We have a run rate compared to last year, where coming off the back of COVID, we ramped up on resources. So you have the full year impact coming through in Q1 2022. There was also an increase in share-based compensation of EUR 5 million and a one-off positive that happened in Q1 2021 in mobile that is now offset in the current year. We have costs in transactional services that increased in the quarter as the adoption of the services increased and revenue -- in line with revenue increase as well. We do see a lower marketing spend as we come off the back of higher spend in Q1 2021 and we also pulled back on some marketing spend in markets where we saw slighter and softer revenue.
All in all, EBITDA reached EUR 125 million, a 32.3% EBITDA margin, which was a 70% -- basis point increase from Q4 2021, progressive improvement as we had anticipated.
Now let me take a closer look at some of our markets, starting with France. Reported revenues in France grew 7% in the first quarter of 2022. Online classifieds up 8% year-on-year. This was driven by Real Estate, which continued to post double-digit growth as a result of good performance of subscription packages with higher value-added items for professional clients, which led to a positive ARPA development and evolution of 14% year-on-year. Jobs also posted double-digit growth, supported by good performance on subscription packages. Motors grew in the quarter, driven by 15% ARPD growth, more than offset the declining volumes that we see. Advertising as well was down 6% year-on-year as we continued to see the impact of reduced activity from media agencies and OEMs. Revenues from transaction was up 31% year-on-year. Consumer transaction volumes grew, but they were partially offset by some discounting campaigns on shipping fees as we look to drive up volumes and adoption.
EBITDA was stable compared to the first quarter of 2021, reflecting the evolution of the business mix with transactional services growing faster than other business lines and advertising declining year-on-year.
The top line evolution was slightly offset by increase in marketing expenses, again, as we drove campaigns to increase reduction on transactional in the quarter. We saw an increase in transactional costs, again, driven by volumes and from promotional campaigns in March. This was positively impacted by some good negotiations we've done on the procurement front with suppliers. Personnel and IT costs also increased in the quarter, again, as we invested in product and technology for further product development.
This saw an EBITDA contraction -- margin contraction of 3.4%.
Moving on to mobile. Revenues in mobile declined by 3% in the quarter. Online classifieds were down 3%. The negative volume impact was partially mitigated by the successful increase of prices, 14% up year-on-year in August, as previously mentioned. Together with tier pricing mechanisms and continued upselling, this resulted in a 28% year-on-year increase in average revenue per listing. Revenue for private listers also grew in the first quarter compared to the first quarter of 2021. Advertising revenue declined in line with what we see in the current car market and OEM spend, which was further exacerbated by the Ukraine crisis.
The volume impact translates into a 1.4 percentage point drop in EBITDA margin.
Moreover, personnel costs increased 31% year-on-year. This was as a result of a positive one-off impact in Q1 2021 and higher share-based compensation. We also did accelerate somewhat product and tech resources as we look to bring in new business initiatives and models.
EBITDA margin contracted 5.5 percentage points year-on-year accordingly.
Moving on to our European market segment. Revenues grew 10% in the first quarter of 2022, supported by a very strong performance in Spain and Italy and by a solid quarter from eBay Kleinanzeigen. Online classified grew up by 16% driven by our growth in our verticals, while display advertising was down 4%. Transactional revenues continued to see strong traction and doubled compared to the same period last year.
EBITDA increased, up 7%, compared to the first quarter of 2021.
The positive top line evolution was partially offset by some personnel increases, strong product development and in line with the growth of the business.
Transactional costs also increased in line with the adoption of the services. We saw a reduction in marketing expenses driven by lower spending in eBay Kleinanzeigen, which had a higher comp quarter and then further pullback in other areas as well.
EBITDA margin contracted 0.8% year-on-year accordingly.
Now let me give you some more insights on the development in the larger markets within Europe markets. As we said, in eBay Kleinanzeigen, we showed revenue growth of 9% in the period despite the very tough comps and the current market environment we see. This was driven by significant momentum in all verticals, especially in Consumer Goods. This evolution was partially offset by a decline in advertising behind softer markets at the moment. Transactional revenue tripled in the period, benefiting from the launch of our shipping offer at the end of 2021.
In Spain, we saw a revenue growth of 16% in the period. This was driven by strong performance in online classifieds, up 19% year-on-year, supported by the continued recovery in the Jobs vertical. The Motors and Real Estate verticals continued to see strong revenue development, up 8% year-on-year, fueled by higher dealer penetration and ARPU growth, respectively. Advertising and transactional revenues were flat year-on-year.
Benelux revenues were flat compared to the first quarter of 2021. The growth in the Consumer Goods sector was supported by high insertion fees was partially offset by a decline in advertising revenues behind traffic softness. Transactional revenues were slightly up year-on-year.
In Italy, revenues grew 18%, mainly driven by double-digit growth in Jobs and Motors and by the strong momentum of transactional growth and services launched in August 2021.
Moving on to our international markets. The international markets revenues were down 8% year-on-year. This was driven by a 16% contraction in advertising and by 4% contraction in online classified revenues.
EBITDA was up 7% compared to the first quarter as we mitigated some of this reduction in revenue with cost savings and a large portion of that being marketing spending. EBITDA margins improved by 6 percentage points year-on-year accordingly.
In OLX Brazil, the next slide is about OLX Brazil. We do not include OLX Brazil in our business segment reporting anymore. However, we believe it's important to continue to provide visibility on this market because it is a huge growth market for us. Revenues increased 20% year-on-year in local currency. Revenue growth was driven by continued expansion of the triple bundle strategy across brands in the Real Estate; by strength in Motors, both from private and dealer revenues; and high liquidity and conversion in Consumer Goods. Transactional revenues doubled in the period. Advertising revenue, on the other hand, similar to other trends we see were impacted by a weaker market.
EBITDA decreased by 38% in local currency. This was on the back of some higher share-based compensation. We also included some elements of marketing and investment in technology as well. This is to support the further development in new ventures and models we do see and anticipate in this market. EBITDA margin was down 10% for the quarter.
Other and headquarters on the next slide represents our cost for central product and technology in HQ. As you saw the trend in Q4 2021, this has increased year-on-year compared to the previous quarter. And this was on the back of a ramp-up in product and tech personnel to fuel some of the growth that we see in our new models and then also to build up some capacity as we anticipate coming off the TSAs from eBay in the coming quarter.
Moving on to the next slide, where we talk about synergies. Rolv Erik alluded to earlier that we are on track when it comes to our synergies for FY 2022. We've already achieved the run rate of 75% of our targeted number, as we had disclosed in our CMD and reiterated in our guidance in Q4.
We speak of economies of scale and our synergies, and the main achievement for us and we want to achieve anyway is the local deployment of our procurement organization. We also want to release TSA -- we want to come off the TSAs in July. This will be 9 months after we have gone live. Now all ERP systems are ready to go and we are transitioning of that system at this point in time. Once we have our arms around the systems and the processes, we will start to see some of those TSAs -- some of these synergies come through in Q4 of 2022.
The first synergies execution -- executed on the IT landscape is done. We are now targeting more synergies on infrastructure and data. The global contracts secured for programmatic advertising is in place, and we'll continue to unlock those synergies through 2022. In the coming months, we will continue to implement our operating models and there we will see further synergies come through as well.
On the platform rationalization, we are busy completing through and handing over some of that rationalization on some of the core platforms, and we start to see some of those benefits also come through in H2 2022. Pretty much on track when it comes to this and firmly confirming the EUR 130 million for the 3-year period as we had anticipated.
I will now move on to other P&L items. On this slide, the Q1 2021 column is a table that refers to the IFRS reported numbers. Here, we only talk about the legacy Adevinta assets so you see some material changes in 2022, and I'll explain them now. Depreciation and amortization was up EUR 50 million year-on-year, and this is mainly due to the amortization of the eCG intangible assets that we took on, on purchase of these businesses.
The other income was up EUR 26 million year-on-year due to the gain on the sale of InfoJobs Brazil, offset slightly by integration costs related to the eCG acquisition.
Net financial items were up by EUR 360 million (sic) [ EUR 36 million ] compared to the same period last year. This is mainly due to a gain in foreign exchange with the appreciation of the Brazilian real against the euro, which was partially offset by the increase in interest expenses related to the new financing and amortization of the loan issuance costs.
Taxable income improved by EUR 11 million, mainly due to an adjustment of previously recognized income tax provisions related to the Mexican assets.
On the following slide, we talk about our strong cash flow generation profile. Again, another solid performance from a cash generation perspective. I'll just explain some of the more material movements in relation from EBITDA down to your actual cash. We had a negative change in working capital and this was off the back of accelerated payments we did, and we had to do that before we had the conversion to the new systems to ensure that our suppliers were paid on time and that will normalize over the next couple of months. We also prepaid some expenses related to our global contract with a cloud provider. These prepayment allows us to benefit from future discounts going forward as well. So you will see the benefits of that come through.
Our CapEx is essentially the capitalization of our development costs and is circa 6% of our sales. Again, I've already spoken about the share-based compensation, taking you to an adjusted net cash flow of EUR 49 million, still solid.
Moving on then to deleveraging on the next slide. Our total cash position as of the end of March was EUR 124 million. Our senior secured leverage ratio was 3.8x. And we're still on track to achieve our 2 to 3x over the next 18 months.
We did launch a share buyback program in the quarter. The first tranche was 4 million shares completed on the 22nd of March. The next tranche of 6 million shares was launched on the 6th of April. We managed to pay back EUR 75 million of debt in the period as well. And one of the other elements we are doing is to ensure operational optimization, we have taken measures now underway to reduce our interest expense. We're doing this by looking at what requirements on a true cash position we need and making sure we optimize on that.
Moving on to the last slide, strong liquidity and long-term debt maturity. Liquidity remained strong and stable, and we have some ways to go before the maturity of our debt. With this strong balance position and a good balance between investment and cost control as we saw in the Q1 results, we believe we have the right ingredients to take advantage of market upswings or have the levers to pull on the back of further deterioration in market conditions.
A solid quarter, and we reaffirm our stable outlook and we reaffirm our forecast for 2022.
With that, I wrap up and hand over back to Rolv Erik.
Thank you very much, Uvashni. Now as outlined during our Capital Markets Day in November last year, we see good opportunities across all our businesses with large monetization runway in core markets, Motors and Real Estate and the potential to expand throughout the transactional value chain with new business model and largely untapped secondhand commerce pool.
The integration of the businesses is progressing as planned, and we remain on track to deliver on the previously announced synergies that will progressively contribute to accelerated growth and improvement in EBITDA margins.
As a result, repeat our core markets revenue growth target of approximately 15% and driving then the EBITDA margin to 40%, 45%, notwithstanding the required investments.
In the short term, we're facing temporary headwinds with low production levels on new cars globally, and that has a knock-on effect on used car listing volumes and on the OEM's marketing spend. Throughout the year, the financial performance is expected to mirror the recovery trajectory in motors volumes, the [ bond ] evolution, planned pricing initiatives and the ramp-up of synergies, including a progressive acceleration in revenue growth and margin improvement.
We expect core markets revenue growth to be low double digits subject to market development for the full year and group underlying EBITDA in the range of EUR 575 million to EUR 600 million.
In France, we'll continue to benefit from our resilient Motors and Real Estate business models and our ability to drive ARPU growth through upselling and price increases. We're also seeing accelerated traction in transactional services on the back of investments in the last couple of years. As a result, we expect revenue growth to accelerate in the second half of the year.
In mobile, we'll benefit from further pricing initiatives implemented in April '22 as well as easing comps throughout the year. The expected delay in industry volume recovery is likely to be mitigated by softening demand induced by the overall macroeconomic environment. And the resulting improvements between supply and demand, the balance there is expected to have a positive impact on average live listings year-on-year development. And that drives, of course, the platform's monetization level. In parallel, we'll continue to invest in our product offering and build new business lines, such as online buying and selling.
In the European market, we expect continued growth throughout 2022 on the back of a solid job market in Spain and further ramp-up of eBay Kleinanzeigen. Transactional services are expected to further accelerate as we enhance products and increase adoption. We'll continue to drive monetization in Motors and Real Estate and to improve competitive product offers in these categories.
Right, that was our presentation. I will now open the Q&A session. My colleagues from the Executive Committee and I are available to answer your questions. So operator, please go ahead.
[Operator Instructions] Your first question comes from the line of J. Barnet-Lamb from Credit Suisse.
Three from me. So firstly, when we consider the now lowered third-party car sales forecast on Slide 9 and the trough and small upward movement in cars on site on mobile, the lower forecast sales, how much does that impact your internal expectations for stock on site in late FY '22? I'm just trying to figure out what's baked into your guidance effectively.
Then secondly, can you clarify the plus 28% mobile average revenue per lead, that does not include the April price rise, right? Can you remind us how material that price rise was?
And then with volume comps getting easier or far easier, could you talk a bit about your overall expectations for mobile revenues going forward? Any discussions around the moving parts would be great.
And then, finally, on share-based comp, you've done EUR 12 million in Q1. I think, Uvashni, you stated it will be broadly in line '22 versus '21. Is the 12 million a good quarterly run rate or is there any sort of fluctuation through the year there?
Thank you. You kind of broke up there during the final part. If you can repeat that part about the share-based compensation.
Yes. The final bit on share-based comp is I think Uvashni said that '22 -- FY '22 will be comparable with FY '21 in absolute levels. You've done EUR 12 million in Q1. Is EUR 12 million a good quarterly run rate or is there any seasonality or anything else impacting it through the year?
Right. Okay, I'll start and then I think Patricia can also help me out on mobile. So what we're seeing is that there is -- right now, there's a softer demand in the car sector in Germany and that balances more the supply and the demand situation, leaving longer listings. And we've also seen a small uptick in the number of listings. And we have also, as you know, done a price increase, and Patricia can come back to that. And the price increase has been implemented from April 1, last one. We had one in August last year and then we have one in April this year.
And then -- so your question about that ARPU improvement, yes, that was without the latest price improvement. So it was including the price improvement of 14% from last year. And then there were upsell products that accounted for the rest of that leads improvement. But do you want to provide some more color on that, Patricia?
Sorry, yes, I fully agree to what you have said. So I think with regard to the price increase, we have in April this year raised prices by, on average, 15-ish percent depending on the size of the dealer. And we have also introduced a value factor, which considers the average price of the dealer's inventory. So that is something that you do not see in the ARPL improvement that we have recorded.
Right. Share-based compensation?
Yes. For sure. I would look at the comparable basis of 2021 as a comparable number in terms of your forecast. One of the things you need to consider though is this will also depend on new joiners and some of the management changes we have. But I would anticipate that being a good proxy of where we would land on share-based compensation.
Was that -- did we fully answer your question?
Yes. Just 1 -- maybe 1 follow-up. So the point that you alluded to there, Rolv Erik, with regard to supply and demand getting slightly more balanced leading to a slightly longer duration of listing, which is aiding listing volumes on site, was that expected from your perspective? I mean if we think about the guidance that you've given, is that better than you're anticipating when you gave that guidance?
Well, there's always a bit ups and downs, right? So as you've seen, the car sales recovery has been a bit slower than we expected. And this has been a bit better than expected. So that was not really included in the guiding, but you can see that some of those effects are kind of balancing each other out.
Your next question comes from the line of Miriam Adisa from Morgan Stanley.
Firstly, just to follow up on mobile, what's sort of been the response from dealers to that 15% price rise that you've done in April? Has there been any additional churn? And can we just confirm that there are no more price rises expected for the rest of the year?
Then secondly, on the guidance, I mean since you've set the guidance, clearly, there's been some more sort of negative headwinds around advertising and then also the Motors as well. So I guess what really gives you confidence in hitting the guidance for the year? I know you did speak about some of the offsetting factors in Motors. But what can you do to mitigate some of these factors if they do deteriorate further?
And then, finally, just on the synergies, so you mentioned sort of 75% secured already. Do you think there is any upside to where you might be by the end of the year? Or is it that you've just been sort of focused on the low-hanging fruit and getting that additional 25% might be more challenging? Just any more color on how you're thinking about that for the rest of the year.
Right. So you want to answer the question about how the dealers received it, Patricia, the price increase?
Yes, yes. Sure. So in general, as you can imagine, our dealers are never really delighted when we raise prices. But looking at the impact we saw in terms of churn, the outcome is very much in line with our expectations. So there were no negative surprises there.
Right. And we did a price increase in August and we did one in April, so we have not anything further planned for this year. We're constantly looking at how we can improve our products. So we're seeing what can we do next year in terms of delivering better products. And as I said, there are actually 3 levers we have when it comes to increasing the yield. And I think it's interesting -- I think it's a good thing that the car industry is doing so well, right? So dealer profits have been very good, which means that our take rates have not increased. So we think that we can do more in longer and medium term on products and also on prices and upsell and new innovation.
When it comes to guidance, of course, the top line guidance is subject to market conditions. And we said that all the time. That's why we said that it's low double digits and it's definitely subject to market conditions, but that is what we're seeing now based on our latest forecast.
When it comes to the guidance on the EBITDA, then, of course, there is more things we can do. So what we need to do then if the revenues are not developing as planned, then we have the costs that we have to do with necessary on the cost side in order to meet that guidance. So I think that's a comment on the guidance.
On synergies, I think we're sticking to our guidance and we have repeated today what we're trying to achieve. And so I don't want to promise more than that.
Yes. No, I think we had -- really did concentrate on the whole low-hanging fruit, but we did concentrate on those synergies to get ourselves off the TSAs to make sure that we are truly independent from eBay and the TSAs. Because once you have that, then you can truly start to drive your operating model and drive some of those synergies, too. And therefore, to be able to do that and implement that takes a lot. So the second half is really concentrating on that, and then we'll see the full benefits of that coming through.
Of course, we continue to look for further improvements and synergies as we can. But in this year, we want to really concentrate on getting off those TSAs, making sure we have the right systems and processes in place, have the right contracting in place and then drive further improvement through to next year and the following year as well.
Your next question comes from the line of Chris Johnen from HSBC.
First one, getting back to a former comment with respect to demand sort of softening [ and recovered ], I think there was a comment specifically for mobile. Is there similar patterns that you see in France, for example? Maybe you could quickly comment on that.
And then I'm wondering as far as coming back to the guidance question, maybe you could remind us on what your current expectations are with respect to particularly the Motors situation improving throughout the year so that we get a bit of a better understanding of how you see phasing for the year. I think that would be helpful.
And then given the quarter is halfway through, maybe a quick peek into the running quarter. Do you see improvement overall on the top line with respect to the first quarter? Any sort of color on that would be appreciated.
So the first question was about the car market in France, Antoine?
Yes. So we have more or less the same market. The difference between mobile and leboncoin is that we have -- as you know, we have a stronger subscription model so we are less dependent on the volume variation and you see it on the slide we show on the Motors market. So at this moment, we are more resilient and we are resisting well.
We are doing exactly what mobile is doing, it means that we are increasing our prices. We are bringing added value like a C2B offer for our car dealers. So we are taking care of a lot of them, and we are growing on this market. But honestly, this market is still under pressure, but -- the volume. But the business model we have is more resilient.
And I will comment the same for Spain as well. Same situation as in France.
Yes. And when it comes to the Motor market, what I said previously was that yes, especially in Germany, we're seeing some mitigating effect by that -- we're seeing a mitigating effect by the ads staying for a longer period of time. And then the other effect has been that the production recovery has been somewhat slower than anticipated by the beginning of the year and I think the latest [ HIS ]forecast was slightly below what they gave out last month.
So that's why we said that, yes, the production will go up and it will definitely go up in the second half of the year. And that's why we say we'll see an accelerated effect from this in 2023. What's positive then, what was helping us for this year is then the price improvements went down, the demand effect and also that we have somewhat softer comparables in the last half year for mobile.
Yes. And then in terms of what we're seeing, we're not providing guidance, I think what we'll see is for Q1 it will be thereabout or in line with what we see in Q2 that we saw in Q1 with possibly some upside. But at this point in time, we are cautious because we are seeing some uptick, but how that plays out, you'll see.
Our recovery, if you want to -- you asked what we anticipated in terms of the progression and recovery, as we said, we expected production to come back in H2 and then we had a lag effect in terms of the used car supply into our market. Therefore, our recovery is H2 loaded and more especially in Q4 loaded. So as you think about that progression, you will see that come through in the second half of the year.
Yes. And also I think when it comes to current trading, it's fair to say that the advertising market remains challenging, it goes up and down. You can see that, that market is tough and that is definitely influenced also by the -- of course, by the car market, by the OEMs, and by the general macro situation and the war in Ukraine. So we anticipate that -- we said that in the CMD that we have growth ambition there between 0 and 5%. But we expect this quarter to be challenging also on the advertising side.
Your next question comes from the line of William Packer, BNP Paribas.
Firstly, around marketing spend, I was a little bit surprised to see it down year-on-year. Could you just talk to that in a bit more detail, I suppose, perhaps an important part of that was the reduction within the international segment. How much was marketing down in the core business? And how should we think about it for the rest of the year?
Secondly, for Q2, just to come back on that, with specific regards to advertising, Jobs and listings in the auto segment, I think from your previous comments and from the tracking, it's clear that Motor listings have bounced a little bit. But how are ad and Jobs doing in Q2?
And then, finally, there's various comments in the release to transactional segment costs scaling with revenue. Could you just help us think about the margin of that transactional business and how it's developing? Is it going down because of the investment in the new geographies? Or is it going up because of the progress in France?
So the first question, Bill, was on marketing spend and that will vary from quarter-to-quarter. And I think under competitive reasons, we don't want to be too specific about what we're going to do in each market going forward.
But Antoine, you want to comment on the marketing we've done in France?
Yes. On the marketing budget of our different geographies and our different verticals, we are sticking to the seasonality of this market and we try to accelerate when we can. So it's why you see some movement between quarter and even some months. But you should see it on the global year, not quarter-by-quarter.
But we are controlling this marketing spend. Just to remember, in France, last year, we have our 15th anniversary in Q2. And so -- but this year, we have decided to invest more in Q1. But it's changing depending on the goals of the quarter and the markets we want to push. But we have some discipline on this marketing budget and this is what we will continue to do for the rest of the year in France, but probably also for the rest of the world.
Second question was on advertising. And then we said that the display ad market will remain challenging also in the second quarter. And then you asked about the Jobs. Gianpa, you want to comment on that?
Yes. Jobs is a vertical that has higher cyclicality compared to other verticals. So we got a bit nervous last year when Jobs was declining strongly, and now we see that this is bumping up very strongly with the reactivation of economy. We have seen a very strong Q1, and so far, we don't have any evidence of a slowdown. In particular, our key contributor in InfoJobs in Spain, we saw it growing more than 40% in Q1 and a very solid growth also we can observe the same in this first part of the second quarter.
Yes. And then the third question was about the transactional cost and the transactional business model. And Antoine, you want to comment on that?
Yes. So as you know, the transaction business model is really important for Adevinta, but also for France. We said during the last quarter that we will target to reach the profitability on this activity this year. So this is what we are doing, the best we can.
Also because we are optimizing a lot the shipping price on the platform. We are working on many funnel KPI to improve the conversion rate. So we should be profitable this year, as expected, without touching the volume. So that's the good news. The test we are doing are not attacking the volume, but they are improving the profitability. So that's something we'll continue during the second half of the year, but that's the positive sign of this activity for this year. And the rest of the portfolio is continuing to invest to raise the level of product country by country and to follow the playbook of what have done in leboncoin during the last month.
Yes. Absolutely right. And in particular, in Germany and also in Italy where we want to drive adoption, we're still in unprofitable grounds. But this is what we also communicated in Capital Markets Day. We know that this year and next year, we'll, at a portfolio level, still be unprofitable. But then we see a 20% margin opportunity in the long term.
Just to come back on 2 specific comments, so firstly, in terms of total marketing across the group for FY '22, should that be up, down, the same? How have you budgeted for that?
And then just in terms of the advertising comments for Q2, you said it's a tough market. Is it getting worse? Or is it the same toughness as Q1?
So on marketing, we don't comment on our total marketing budget for the year, also because you need to understand that we need to be elastic on how the market developed and also our top line develops. So on that, we cannot provide guidance on the full year.
I'd just like to add. I mean, we've provided guidance on EBITDA, Will. I mean so what we do with marketing is it will be tactical. Like we've done with -- in Q1 with our international markets, where we saw softening and then we pulled back on some marketing because we realized there wasn't going to be an impact. So we've pulled back.
And similarly, what we have done is going into Q2, going into Q3 and Q4, if we do see the improvement not coming as well, we can't pull back on marketing. We don't expect a higher marketing spend than we had seen last year. So we definitely are using it as a key lever and doing it very, very smartly around when we can do it. Especially if you see in Q3, normally, your activity levels are much lower, so you can think about marketing in a very different way. So the team is using that as a key lever in managing that very, very smartly.
We're also benefiting now from transferring best practice across the portfolio after the eCG integration. So we can be, as Uvashni said, smart about that. The second question once again on advertising, yes.
And I think the advertising market is depending on 2 important things. One is the volume. So we are depending on the inventory on each platform. And we are comparing Q1 '22 to Q1 '21 where we had some lockdown in many countries in Europe. So it's why you see some headwinds on the volume side.
And the second part is the OEM. The OEM strategy now, they have up and go many headwinds on their marketing strategy. They are opening marketing budget. They are cutting marketing -- the budget that we cater. So we are dependent on that. But at the same time, this is for the national display advertising. At the same time, on the contrary, we are developing more and more local advertising and direct relationship with our customers. And this part is positive. This part is improving, especially in Spain or in France where we are quite good on that. We try to accelerate to have the direct relationship with -- directly there and will be less dependent on the OEM side.
Your next question comes from the line of Lisa Yang from Goldman Sachs.
The question has been asked ready, but just a couple more. Firstly, can you maybe just give us an update on the current new search process? Any update you can share in terms of the timing or whether you're more tempted by an external versus internal candidate? Any update on that would be helpful. That's the first question.
The second one is on capital allocations. You mentioned you have accelerated the buyback program and included the share price, those look very attractive at these levels. Could you do more on the buyback? And once you do sell the asset [ cycle trade ], et cetera, could you just comment on the use of proceeds and whether a lot of that could go into buybacks?
And the third question is then on the European market. Just wondering, a few moving parts there. Italy looks very strong, up 18%. I know there's advertising exposure there. So wondering if that was so strong, could that basically -- is that stable?
And similarly, why the Kleinanzeigen has decelerated in Q1, so from the plus 20% in Q4 to plus 9% in Q1. So just wondering what's going on there and what you're expecting for the rest of the year?
Why don't we start with the last one.
Okay. Thanks, Lisa. So indeed, overall, the performance in European markets has been strong, right, 10% growth with stable margins. So we're satisfied with how the portfolio is developing. Then every time some markets perform a different level, we are now seen a couple of quarters with strong development in Spain and in Italy.
So commenting in Italy first. Most of the growth is coming from the verticals, in particular in Motor, but where we still have room to grow because our penetration is small even if the market is difficult. But then Jobs is doing very well and then to our transactional services is also progressing very fast. So overall, it is just very good execution from the team and capturing the market opportunity that is there.
When it comes in Germany, yes, it's true that in Q4 we grew 20% and in Q1 we grew 9%. So first of all, we are facing our tough comparison because Q1 2021 was a lockdown period. So like activity level and the vibrancy was -- and the traffic, and hence, the advertising was very high. But in general, I want to reassure you that the development in eBay K is very strong and we're very satisfied with how our position is developing there.
So let me give you some color, right? Traffic is down 4% year-on-year, but is 39% up versus 2019 in the same quarter. Listings are up year-on-year. Real Estate customers are increasing 18% year-on-year. SMB subscribers are growing 41% year-on-year. So the development of the key drivers of the business are very solid.
And if I have to give a bit more color on the 9% growth in terms of revenues, we see that advertising is declining 4% year-on-year. But also there, this 4% decline is driven by a 6% decline in third-party advertising and an increase of 15% year-on-year in first-party advertising. That is really what our strategy is saying, right. We want to expose ourselves more and more to first-party advertising that is less dependent from the cookie and these kind of regulations.
And then what is good is that, well, we have already commented the transactional business that is growing more than 20% year-on-year, but also the verticals are growing very, very well. So revenues from professional customers are growing 22%.
So now we are a bit exposed to the fact that eBay K is still significantly exposed to advertising because more than 50% of the revenue of eBay K come from advertising. But over time, we are growing in the area of the business that is strategic. That means first-party advertising, transactional and verticals.
Right. On the capital allocation, Uvashni?
The priority for me at this point in time in the current environment and as had we had anticipated would be to delever and to ensure that we prioritize deleverage at this point.
Right. And for the CEO search, that's progressing as planned. I'm obviously not part of the process, but the Board is working with an external recruiter and there are -- and that's all progressing well according to plan.
Okay. There's no -- nothing on timing like by the end of year Q3, Q4?
Well, I think Lisa, as I think mentioned previously by our Chair, there's internal candidates and external candidates and I think it will depend on that. If you would take my guess on it, I guess, before we have the next quarterly announcements, some kind of announcement will be made, would be my guess. And then the speed of the transition will then depend whether there is an internal or an external candidate.
Your next question comes from the line of Andrew Ross from Barclays.
I've just got 2 more. First one, you've touched a lot on accelerating price rises in mobile. Can you just talk a bit about your pricing plans in other countries through the rest of the year and whether there are any plans to accelerate increases? I think in the past, you thought about doing something in France. So would be curious to understand what the plans are there?
And the second one is back on the TSA agreement, which is coming off in July. Can you just remind us how big that is and how much that will impact the central costs into Q3 and Q4?
Right. So starting with the price increases in other countries. We're starting with you, Antoine, and then go to Gianpa.
Yes. Usually, I prefer not to communicate too much on the timing because of the competition. But you know that we are changing our prices -- we used to change our pricing on Real Estate usually in September and this is probably what we will do this year again.
And on the Motor market, we are doing it at the beginning of the year. So we did it already in January and we have done another small one in April. But no more before the end of the year. And for the other markets, Gianpa?
Yes. So when it comes to the key European markets, so in general, Andrew, you should understand that over time like we try to increase ARPU. Also when we don't increase listing price because we try to move customers from cheaper packages to more expensive packages, right? So this is something that we do continuously and help us drive ARPU up during the year.
When it comes to listing increase, right, we've done already some significant price increase, but what I can share with you is that we might do something at the back of this year in Real Estate in Germany. And that we also believe that, over time, while we migrate our Fotocasa customers in Spain to the new package, you might see also some good development there for the rest of the year. But I'm not ready to disclose any other concrete plans for the other assets.
But the question we're constantly working on seeing how we can do a better job for our customers with the products and we're watching the yield rates, which we think we have been quite conservative on. And then the other question was around the TSAs, Uvashni?
I guess in this year, what you're going to see effectively, Andrew, is over the longer term, you're going to see a reduction in cost because what we are doing is we're bringing on some capabilities ahead of some of the transition on our other businesses as well. So you might not see that offset immediately, but you definitely will start to see some of that run rate into Q4 this year in terms of the TSA costs.
Your next question comes from the line of Adam Berlin from UBS.
Just a couple of quick ones for me. Can you just remind us of the split in your 25% advertising revenue between third-party and first-party because that seems to be increasingly important if we're worried about the future of third-party advertising.
And the second question is just to pick up a comment by Uvashni about mobile revenue in Q2. If we're seeing improving number of listings and the impact of a 12% price increase from April, shouldn't there be quite a big step up in mobile revenue in Q2? Why did you say that we shouldn't expect to see much improvement? Is that just because advertising is falling off a cliff in Germany for OEMs?
So Zac, you want to comment on the split in the advertising? And then Uvashni, you want to comment on the mobile? Zac, are you there?
Yes, yes. Within core markets, the rough split between third-party and first-party is 60% revenue for third-party and 40% for first-party advertising.
Right. Okay. And then of course, we're working constantly to improve the first-party part of it to increase that as a percentage of the total. When it comes to the question on mobile, Uvashni.
Effectively, year-on-year, we're still seeing volumes and advertising down, right? So although you're seeing some positive elements year-on-year, you're still having that volume impact and advertising impact. So yes, we're seeing improvement and back to positive, but we will see most of the acceleration in H2. And that's why I've been cautious around that because when you look at the year-on-year comparative, there is a differential.
Sorry, but just on Q-on-Q, Q1 revenue for mobile was EUR 68 million. Shouldn't Q2 be much higher than that because of the improving listings and the price increases?
Possibly, yes. But we still and we don't provide full Q2 guidance, but we are seeing positive trends in that direction, right?
Your next question comes from the line of [ Morgan Steven ] from JPMorgan.
Three questions from my side. I mean the first one, again, on mobile, but if you can comment on also the change to the pricing packages. I mean, obviously, it just started. But just wanted to understand what the latest thoughts are actually in this regard.
And then, secondly, also on cars. I mean, clearly, your midterm guidance for 15% growth and 40% to 45% EBITDA margin is highly dependent on car volumes coming back. Could you remind us what is actually the scenario in terms of volume that you actually anticipate to get to this guidance, yes, i.e., is it basically 2018, '19 levels? Or what are you actually baking in to get to this in the midterm as you say?
Then lastly, again, for Uvashni, on the debt repayment of EUR 75 million. So you're basically saying you're in debt repayment mode until your target leverage is reached and everything. Every maturity that comes up is just going to be repaid rather than refinanced. Is that -- is that a fair reading? Yes, those are my 3 questions.
Thank you. So the first question goes to you then, Patricia, about the prices and packaging in Germany.
Yes. [ Morgan ], if I understood the question correctly, it was about the most recent price increase we did in April, right?
No. It was more about -- you mentioned this, it was more about how you actually changed the packaging structure, yes, rather than from just purely transactional. Basically, what are the latest developments in terms of changing package structures for dealers rather than just the pricing component.
This is a project we are currently working on. So I think that's also something that we have communicated in the last update we gave that this is something that we will continue to work on to make sure that we continue to improve the value that we provide prior dealers. And we will continue to review what is the ideal package structure that allows dealers to select the package that is not suitable for them, but also that allows us to monetize and grow our revenue, obviously. So there is an evolution that is currently ongoing and that we're currently working on.
With regard to the most recent price increase, we changed the base prices and some incorporated a value factor, which considers the average car price because we do think, as Rolv Erik said, that in general, the car market is healthy in terms of the levels of profit. And we are doing -- making these changes to basically also increase our yield.
Right. And behind our prognosis is that we expect the car market to normalize to normal production levels. And there we're following the common industry standards, we're watching what the OEMs are saying. We're watching [ HIS ]. And so we're -- and they are -- you know that the production was especially low in the third quarter last year, so it will definitely be an increase in production in the second half of the year. And then we said that will accelerate during '23. And then we expect in '23 and '24 to see a more normalized car production level.
When it comes to deleveraging, I think the key thing for us in the short term is to delever, but we've also got a long-term target of 2 to 3x on debt and leverage. So we would, of course, anticipate to get to those levels. And then, of course, when the opportunity comes up for refinancing, we will look at that very clearly from a capital structure perspective.
But right now, we would like to get into the 2 to 3x level because then it affords us the opportunity to continue to invest and grow as well as maintain enough of room for further growth organically or inorganically. But in the short term, with the current market environment, deleverage is the key priority for us. And then, of course, when the opportunity provides itself once we're in that range to then think about other alternatives from an investment perspective.
Your next question comes from the line of Silvia Cuneo from Deutsche Bank.
My first question is around what we are seeing in the market with raising inflation and lower discretionary spend. Can you please discuss the potential impact to the Consumer Goods transactional business? Have you seen any changes in consumer demand so far? And here, I'm just wondering whether it is fair to think that this segment could actually benefit from higher demand for used items as the purchase power reduces.
Then secondly, about the real estate vertical, thanks for sharing those examples about the latest product addition. And just wanted to ask about the growth that you've seen on the customer side of things, whether you can comment around as these customers are switching off other platforms or perhaps they are seen on competitors' portals are also now using the added inter-portals?
So I think the first question goes to Antoine. It's about inflation and consumer goods, how it's affecting.
Yes. So globally, you know that our general platform are very useful during growth period, but also during the crisis period. And most of our countries are facing some inflation of the Consumer Goods platform like leboncoin, Subito [indiscernible] will benefit from this situation. Why? Because people are looking for money to make savings, but also to make money. And we expect that the volume will be solid and assume that the prices will go up in some parts like electronics, for example.
So that's probably an opportunity for us, and it's why we are operating so much on the transaction because we think that it's a good service for our users, but an opportunity for our platform for the next months.
And maybe on Real Estate...
If you comment France, then I comment the rest. You start and then continue.
So on Real Estate, the first, the volume in France, the pressure on the volume has started before COVID, and why? Because the pricing was going up, but the offer was going down and the demand was going up a lot so especially in some areas like Paris and some big cities in France. And we see now that the market is still very strong, probably slightly below last year, but last year was an exceptional year, but probably one of the best year, again, in the last 10 years.
Our Real Estate alone, they are looking for mandates. They are looking for flats and houses to sell. So it's why we have reacted quite strongly. leboncoin, we have launched some C2B offer, a lead generation effort to help our customers to get some leads to propose goods to the market.
This is what we are continuing to do. We will -- we have done some pricing also adjustments and packages also to propose to our customers. This is something -- and it's a dynamic market. So we'll continue to be positive on this market. And we were double digit during Q1, which is a big strong performance with the volume we have. And we will continue to work for the next months and very confident on this market.
Okay. So when it comes to European markets, the key positions are in Spain and an emerging position in Germany, as we said. So in Spain, the situation is developing well. In terms of number of customers, we are slightly ahead of Q1 2021. So we see a number of customers growing in Fotocasa with also good development of our ARPU there because we have introduced a new business model and we are successfully migrating our customers to a new packaged service. So the development is going well there.
Then I commented already on eBay K, where we see that a number of customers are growing 18% year-on-year. And we see that development as very positive because we are now on par with the historical #2 in the market and with a strong restructuring. So we're very satisfied and more innovation and more products is coming for Real Estate in Germany, so we're very confident of our development there.
And instead, in Italy, we are the #3 position because we have the 2 verticals that's competing very heavily, as you know. But also there, as the customer's second choice, we are growing in terms of number of customers, 5% year-on-year. So overall, good development in Real Estate.
We will now take our last question. And the last question is from the line of Daniel Haugland from ABG SC.
I think the key question for me will be to Uvashni. In the cash flow, the working capital is strongly negative compared to historical Q1 seasonality. I think you shortly commented on that in your presentation, but can you just confirm that this will reverse in Q2?
And how should we think about H2, should we be back to normal seasonality then et cetera, on the working capital?
Yes. It was an abnormal period because we accelerated some payments as we went into system implementations than you normally would in these scenarios. And of course, we did a prepayment as well. Quarter-on-quarter, we don't expect these huge deviations, and therefore, normalize. But we do have different elements that come into quarters, like some quarters we will have tax payments, others we don't. So over the period, you might find that your cash conversion is pretty stable, but it is variability. In this quarter, we don't anticipate anything materially different, but it will also depend on effectively how you have working capital position.
The good thing for us is that we don't have huge capital working capital commitments, and that's the most important element where we don't carry stock, et cetera. So it's just when we decide and choose to make different payments, then it's up to us. So from a variability perspective, I don't anticipate it being at these levels, but you will anticipate some spikes depending on payments that need to be made.
All right. So you so it won't necessarily be reverted in Q2, but more back to normal seasonality?
Exactly that, exactly. I mean these are 2 big specs that happened in Q1.
Thank you. I will now hand the call back over for closing remarks.
Well, I would like to thank everyone for listening in. And please come back also if you have more questions. The management team -- many of us will have Investor Meeting and Analyst Meeting in Oslo today and London tomorrow, but of course, we'll be available for you. So please come back to us with any questions or comments you might have.
And thank you so much for listening and for attending, and have a good day, everyone. Thank you.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.