Schibsted ASA

OSE:SCHA

Earnings Call Transcript 2019-Q4

[Kristin Skogen Lund, Chief Executive Officer]

Okay. So I think I'll start. A warm welcome, both to you here in Oslo and the viewers following on the webcast. We will run through the operational and financial results delivered in Q4. We will have a Q&A in the end, and there's also the opportunity to send written questions through the webcast viewer. So then I will present the operations, and then our CFO, Ragnar Kårhus, he will do the financials. And we also have present, our EVP for News Media, Siv Tveitnes in case anyone will have questions for her also afterwards. Let me then start by something very important, which is a reason for being, our strategy is to create value not only to shareholders, but also to create value to all our stakeholders. And we really need to make sure that everything we do, that it matters. This autumn, we have decided on our strategic sustainability priorities to make sure that we focus on what will maximize our ESG impact, and these priorities include our independent and high-quality journalism, our contribution to the circular economy, and finally, empowering people to make informed choices through our different services. And to follow-up on these priorities, we have set both short and long-term goals, which will be part of our sustainability reporting. And we have also just recently launched something we called a sustainability change maker programs where we have now selected 15 employees from across the group, and they will spend 10% of their time working on different sustainability projects to help us reach these goals. Going then to the numbers. We are, as Schibsted Group delivered steady growth in Q4. Top line grew 8%, and EBITDA came in at NOK 944 million or NOK 822 million, if we exclude the IFRS effect. The top line exclusive Adevinta grew 1%, more or less in line with the development that we saw in the last quarter. Adevinta reported yesterday, a revenue growth of 16% and a stable EBITDA margin of 26% measured in euro, growth primarily driven by France, Spain and Brazil. And in the remaining part of the presentation, as normal, I will focus on Schibsted excluding Adevinta. So overall, we saw a rather similar development compared to the previous quarter. We delivered good growth within the strategic focus areas, we saw 6% growth from our Nordic Marketplaces operations this quarter. Digital subscription revenues in News Media had another good quarter, showing 21% growth. And then within the next portfolio, Lendo grew 4%, driven by Sweden. And then beyond financial services, revenue growth for our growth portfolio accelerated and grew by 16%, and this is primarily driven by continued strong growth of 116% in the new distribution business. At the same time, we also have the same challenges that we saw in Q3. Digital advertising revenues in media, Sweden, in particular. A decline in revenues for Lendo Norway in a challenging market, driven by the change of regulation. And finally, Finn saw a decline in volumes in jobs in Q4, as we indicated in the Q3 presentation, and I'll come back to these topics shortly. And as communicated in previous quarters, we have experienced a challenging advertising market in Sweden. The market is contracting in general, and Aftonbladet is additionally hit by the regulatory tightening of the gaming industry. That has resulted in a 22% decline in digital advertising revenue in Aftonbladet in Q4 compared to Q4 last year. And this has a direct effect on our bottom line and the margin for News Media. In Norway, we are experiencing a more volatile advertising market. During Q4 '19, digital advertising revenues across all our brands in Norway grew by 3% year-over-year. And looking at VG, digital advertising revenues in Q4 have improved from minus 10% year-on-year in Q3 to minus 4% year-on-year in Q4. And then I have to remind you that Q4 last year was a very strong quarter for digital advertising revenues in VG. So if you look at Q4 '17 to Q4 '19, VG's digital advertising revenues actually grew by 21%. So we are -- despite the small decline, we are actually quite happy with the numbers for VG. And then looking more generally at the business model, advertising revenues are important to both Aftonbladet and VG. Last quarter, we presented our focused strategy to mitigate the negative trends that we are experiencing. And as part of executing on this strategy, we have now acquired the majority stake of Matkanalen, which will also be launched in Sweden. In Norway, we have merged the 2 content agencies, Schibsted Brand Studio and VG Partnerstudio, and by that, we have created the largest content agency in Norway, which will strengthen our offering for tailor-made content and will be a unique value proposition in the market. In Sweden, we have reorganized our sales organization, which is now focusing by industries. And finally, we have just launched a new product for high-volume reach here in Norway. It will reach 1 million users within 24 hours, which is quite unique in the market, and we will launch a similar product in Sweden also during this first quarter. To turn around the negative margin development and secure long-term healthy profits for the News Media operations, we have decided upon and started implementing improvement initiatives across our brands and functions in News Media. These initiatives focus on reducing our annual cost base and improve efficiencies, together with new revenue-generating initiatives, although, the effects there will materialize more long term. Examples of such revenue-generating initiatives that are -- it's the new Norge NA product that I just mentioned on advertising. It's also E24, our financial news website, which has the highest web traffic for financial news in Norway already, and which, we will strengthen and we believe it has a big potential as an upsell in the subscription model in the other brands that we have. The main effects for cost reductions will materialize in 2021, and we do expect some margin contraction for News Media over the next few years compared to the levels we have seen in '18 and '19. Ragnar will come back to some of this in his presentation. Then the businesses that we operate in, they have become a data game. And we have a huge amount of great and valuable data across our strong brands and an important element of making Schibsted greater than the sum of its parts is to better leverage this data advantage across the group in order to improve our offering and to create new digital winners. So therefore, we are ramping up our capabilities within data and tech. At the same time, these initiatives have a negative financial impact on our HQ cost, which had a larger EBITDA loss in Q4 compared to the same quarter in '18 and also Q3 '19. We are, however, confident that this will enable us to build digital winners in the future and that this will create value to both users and shareholders going forward. And as we have presented last quarter, Schibsted is presently in a strong financial position, and we will continue to stay disciplined in terms of capital allocation. We have during Q4, continue to execute on our previously communicated share buyback program, but did not quite reach our 2% target before we entered our reporting period. We will complete the buyback program to reach our 2% target. And the execution will depend on market conditions going forward. We have also proposed a dividend for 2019 of NOK 2 per share, which is in line with our dividend policy, that Ragnar will also come more back to that in his part. So now let me then take you through our -- there, let me take you through our 3 business areas, and I will start with the Nordic Marketplaces. As mentioned, we saw 6% total revenue growth in Nordic Marketplaces Q4. This was driven by a strong development within key verticals in Norway and the professional car segment in Sweden. And I am particularly happy to see that the revenue growth and turnaround in Sweden continues at the pace that it does. During September, we launched 3 edits and extra images in the generalist category in Blocket for free. So this will increase classified ad quality, but it does have some negative revenue impact in Q4, as you see there in the generalist part. Looking then at Finn, total revenues grew 6% in Q4, driven by 5% growth in classified and 14% growth in advertising revenues. Finn is very close to the market when it comes to the overall trends in jobs. Q3 was rather good, but we saw and highlighted in the Q3 presentation that there was some uncertainty regarding Q4. Looking now at Q4, Finn experienced a decline in volumes for jobs and volumes for real estates were rather flat. Despite this, revenues for jobs and real estate grew in Q4 compared to last year due to higher ARPUs from performance products like Blink, but the revenue growth was slower than we have seen in previous quarters. The decline in volumes for jobs, which we have seen in Q4 has also continued into the start of 2020. And the decline in jobs is mainly driven by the oil and gas and the construction sector. If you look at the bottom line, the revenue growth and reduced marketing costs translated into higher EBITDA margin compared to both 2018 and 2017. The reduction in marketing spending was driven by the termination of Finn shopping concept earlier and a reduction of Finn off-line advertising in December '19, the latter is simply due to timing as marketing campaigns tend to differ from quarter-to-quarter. Looking at Blocket, like in Q3, the professional car segment is the main growth driver. And the Blocket team has worked very hard on our car offering, and they are continuously striving to deliver better value to the Swedish car dealers. Revenue growth is driven by improved insights to pro-dealers, resulting in increased bump, which creates better and more leads. We have also switched to a new pricing model to a per ad model, which is more transparent. And as I said earlier, we have improved our generalist product in Blocket by offering free edits and more pictures. This affected revenues negatively, but it will improve the quality of ads, which is key to create good matches and grow the marketplace. And then margins are down. This is expected and it's due to the investments we are making in new growth initiatives as well as catch up investments, which will -- which is then leading to an increase in FTEs within product, tech and also sales. And then before moving on now, let me just add that Tori in Finland continued to show good growth in their classified revenue, but their numbers are still small in the bigger picture here. Moving to News Media. We see a continued strong growth in digital subscription revenues for all brands. The focus on increasing value and product experience for every subscriber is clearly paying off. Growth is now more and more ARPU driven for all brands with the exception of EG, where volume increases are still high. And please note on this one that digital subscription revenues and volumes here do only include the pure digital subscriptions, that means subscriptions combining print and digital are not included here. Counting that, our total subscription base in News Media is now around 1.2 million. Then again, there is the significant drop in digital advertising revenue in Sweden, which is the dominant reason for the 6% revenue decline and the margin decrease. And as I said before, going forward, we will follow-up the cost development in News Media even more closely in order to address the negative margin development and also the revenue development that we are currently facing. Looking at VG, they also showed strong growth in Q4 from digital subscription revenues, and as mentioned, the advertising market in Norway is volatile. Q4 last year was an extremely strong quarter for digital advertising in Norway. So advertising revenues being down 4% is actually in line with our expectations. And as a result of the volatile advertising market, VG is tightening their cost control, which has led to somewhat lower cost in Q4, and that contributes to a stronger margin than we saw last year. VG+, our digital subscription product reached a record number of 200,000 subscriptions at year-end 2019. The increased number of subscribers is the main reason for the strong growth in the digital subscription revenues. The ARPU of VG+ was growing only slightly this quarter, and that is a result of different campaigns than last year and different lengths of the subscription periods. VG's mobile audience had a new all-time high, with 1.7 million users in December. And VGTV also finished '19 with record traffic results. On desktop and mobile together, 800,000 daily video views, click-to-pay -- sorry, click-to-play, and then 4.2 million daily out-to-play video views, I think these are very impressive numbers. Moving then to Aftonbladet. A lot has been said already about what's driving the top line development there. Drop in margin fully due to the significant reduction in advertising revenues. Aftonbladet is keeping tight cost control and has through 2019 reduced their cost levels materially. And please note that there is a piece of good news in here because the underlying growth in digital subscription revenues is actually 27% as there is a one-off effect in Q4 due to a change in revenue recognition affecting revenue growth negatively. We now do per day recognition, and it used to be per month. In addition to tight cost control, the team in Aftonbladet is working hard on new initiatives. As a result, Aftonbladet had a record of 2.9 million unique visitors on mobile in one day during Q4. Aftonbladet is the preferred news destination in Sweden among younger users. And Sportbladet is continuing to strengthen its position as the #1 sports destination in Sweden with more than 1 million daily readers. Aftonbladet continues its strategic investment in live rights. Just recently, they acquired the live rights of OBOS Damallsvenskan, which is the female soccer league, for those of you not speaking Swedish. And they have that now acquired for the period of 2020 to 2022. The engagement for Damallsvenskan has increased over the last year and is also the league where engagement among a younger audience increases the most. Aftonbladet is also continuing to roll out its local news sites. Uppsala was launched in Q4, and we see even better results than we saw from the previous launch in Malmö, so that's a good trend. Moving over then to the digital subscription papers, we see overall good results, particularly Aftenposten delivered a strong Q4, driven by both strong growth in digital advertising revenues of plus 21%; and in digital subscription, the revenues grew 18%. For all our subscription brands, the strong growth in digital subscription revenues are continuing showing a 29% growth in revenues this quarter. The growth is driven by ARPU increases, and all our brands are now focusing on increased value per user, testing different packaging or products to be relevant for more user groups. We are sophisticating our subscription work quite a lot. All our brands are also continuing to develop the podcast format, a format that is reaching a younger audience than our subscription papers normally do. The podcast Forklart is Schibsted's larger podcast in terms of unique listeners, and it had 3.4 million plays in Q4, and that is a growth of 139% compared to Q4 last year. Strong growth in digital subscription revenues is the main driver for both the rather stable revenue and margin development that we now see in our subscription brands. Finally, let's have a look at Next. And let's start with Lendo. Sweden continues to grow revenue double-digit in Q4, driven by a strong inflow of applications. The revenue level in Norway was stable on a quarter-by-quarter basis, but it is significantly down year-on-year. We still see tough market conditions with banks having stricter credit policies, and [indiscernible], we see a highly competitive market, both revenues and EBITDA declined in Finland compared to last year. EBITDA in the established operations being Sweden, Norway and Finland is somewhat under pressure, mainly due to the revenue decline in Sweden and Finland, but also due to higher marketing spending in Sweden. Then the reorganization of Lendo with Oslo as a hub to provide a more efficient structure and to enhance our ability to succeed with the international expansion is continuing according to plan, and we aim to have that finalized in this quarter. If we then look at the internationalization part of Lendo, the geographic rollout in Denmark is clearly getting traction with solid development on all key KPIs. During '19, the number of weekly applicants have grown 9x coming from a low base, of course, but still. And encouraged by the Danish development, and based on our thorough research of the banking markets, we now plan a soft launch in Spain during 2020. And the emphasis here is on soft because we will make sure to tweak the product very carefully before we put any spending behind that effort. The development in Austria and Poland is slower than in Denmark, primarily due to more immature digital bank processes, but we do see a slight improving trend in Austria now. But as you know, we have reduced our spending in these markets, and we are continuously tweaking the products there to optimize the processes in our performance before we put much more investment into it. Costs connected with the geographical expansion affected Q4 EBITDA negatively with NOK 19 million in Q4, ending the yearly EBITDA losses at around NOK 100 million, which was what we communicated earlier. If we then look at 2020, total EBITDA losses for expansion is expected to be around NOK 100 million again, so similar to 2019. Then I'm happy to end on a very positive note. We have a good pickup in revenue expansion for the growth segment in Q4, especially driven by distribution. The continued strong revenue development for distribution is especially driven by our new businesses growing more than 100% year-on-year, both in the quarter and on the year-to-year basis -- year-to-date basis, sorry. Helthjem Netthandel, which is the key driver in this area actually grew by 200% in the fourth quarter. I'm also happy to see that revenues in Prisjakt grew in Q4 after a weak previous quarter following a platform change earlier this year, and despite them meeting strong comparable figures from Q4 '18. And in addition, our services, Let's Deal, MittAnbud and Omni, they all showed revenue growth and improved EBITDA margins this quarter. So on that note, Ragnar, I will leave it to you to go through the financials.

[Ragnar Kårhus, Chief Financial Officer]

Thank you. This slide summarizes the revenue and EBITDA development for our business segments. Kristin has explained the main operational drivers of this development. So let me go to the next slide to walk you through the development of EBITDA throughout the fourth quarter. Excluding IFRS 16, Nordic marketplaces increases the EBITDA with NOK 16 million in the fourth quarter. Revenue growth and lower costs improved EBITDA in Finn with NOK 27 million, whereas increased investments into future growth initiatives in Blocket reduced the EBITDA with NOK 13 million. EBITDA in News Media is down NOK 76 million, and that is due to the significant drop in digital advertising revenues in Sweden, in particular. Aftonbladet alone sees a reduction in EBITDA of NOK 61 million this quarter compared to the same quarter last year. As mentioned, VG and Aftenposten, on the other hand, sort of had a positive sort of contribution to the EBITDA development in the fourth quarter. Within financial services, the reduced EBITDA is as it was in the second and third quarter, primarily due to the revenue decline in Lendo Norway, also in Finland. But in this quarter, as Kristin mentioned, we also had some increased marketing costs in Lendo Sweden. The Lendo expansion into Denmark, Poland, and Austria had a direct negative year-on-year effect of NOK 6 million, compared to the fourth quarter last year, whereas EBITDA losses this quarter was NOK 19 million. And then within the growth portfolio, the EBITDA increases -- increase comes from the EBITDA uplift in Prisjakt, but also then due to the high volumes during the black week, but also then positive development in Let's Deal and distribution. Negative EBITDA development at HQ and other central units, which increased with NOK 27 million this quarter, is primarily due to lower capitalization within product and tech, but also then increased costs from building capabilities within data and tech to leverage Schibsted's strong reach and vast access to data, as Kristin described earlier. Overall, EBITDA is then reduced with NOK 99 million. And if you include then the positive IFRS effect of NOK 83 million, EBITDA ended at NOK 460 million in the fourth quarter. Taking a quick walk-through of the income statement. We do, of course, consolidate Adevinta since we own 59% of the group. But on this slide, we focus on the income statement ex-Adevinta. There are a few special items this quarter. The main effects come from the IFRS 16 implementation, where operating expenses has sort of positive effects of NOK 83 million. The flip side of this is NOK 69 million in increased depreciations and NOK 16 million in increased financial costs, meaning that effect of IFRS 16 on the profit and loss before tax is fairly neutral. Impairment losses is related to a write-down of goodwill in Moteplatsen. And on the other expenses, we have booked costs related to headcount reductions in News Media and restructuring costs following the Adevinta spinoff. Looking at the tax rate, the underlying tax rate is stable and slightly above normal tax rates in Norway and Sweden. The reported tax rate is affected by tax losses for which no deferred tax assets is recognized. Our operating cash flow, ex-Adevinta and ex-IFRS 16 effects, improved by NOK 181 million in the fourth quarter. This was, though mainly driven by timing differences of tax payments as taxes were primarily paid in Q1 and Q2 in 2019, whereas compared to the main payments in Q4 in 2018. CapEx is 90% lower than last year. This was driven by a lower rate of capitalization in product and tech. The flip side is to increase costs, as I mentioned, on HQ and other in the previous slides. Then some comments on 2020. Looking at organic investments affecting our EBITDA this year, there are mainly 2 areas, which I would like to highlight. The first is Lendo. The investments into new markets for Lendo will be roughly on the same level as in 2019, meaning an EBITDA effect around NOK 100 million also this year. Second is distribution. We will continue to focus on new and innovative products and tech solutions supporting the strong mega trend of growth within e-commerce. One product in this field, which we believe has a strong potential is Svosj that is our subscription-based delivery service in Norway, which leverages Schibsted existing last mile distribution network. The product was launched in November 2019 and will dilute distributions EBITDA margin in the first 2 to 3 years. In 2020, we plan for investments within the distribution areas such at around NOK 50 million, which will affect EBITDA accordingly. Our financial targets -- then I will walk through some of the main points of our financial targets and policies. For Nordic marketplaces, our revenue targets remain unchanged, with a revenue growth rate of 8% to 12% in the medium to long term. More negative macro trends like we currently see a sign of in Norway, particularly affecting Finn's job vertical, could lead to a somewhat weaker growth development in the short term. Looking at News Media, the significant drop in digital advertising revenues during 2019 has had a severe effect on News Media's bottom line and margin. As presented, we have started to implement initiatives to reduce the cost base and create new revenues. But this turnaround will take some time. Hence, we expect some margin contraction over the next few years compared to what we have seen in 2018 and 2019. Other policies for M&A remains unchanged, with focus on strengthening our market positions, combined with bolt-on acquisitions within adjacent businesses. In line with our policy, stating that we will pay a stable to increasing dividend over time, the Board of Directors of Schibsted is proposing a dividend of NOK 2 per share for Schibsted for 2019. This is the same as Schibsted paid for the financial year 2018, prior to the spin-off of Adevinta. Our leverage policy target stating a net interest-bearing debt-to-EBITDA ratio in the range of 1-3x, depending on attractive investments becoming available is also unchanged. Our capitalization over time will be addressed through dividend and share buybacks. And we will continue then the ongoing share buyback program in order to reach the 2% target that Kristin also mentioned, of course, the execution will depend on market conditions. Finally, those of you who are familiar with our profit and loss statement. Note that a significant part of our HQ and other costs stems from centralized product and development and product services. These services are delivered, but cost-wise, not fully allocated to the businesses -- to the business segments. To create better transparency on what is driving these costs, we will allocate them based on usage to our operating segments, effective the first quarter from Q1 this year. Internally, this is combined with improved processes to facilitate stricter prioritizations and improved cost control. Restatements will be made public some weeks ahead of the first quarter reporting. And although, this will lead to some extra work for those of you that have built financial models for Schibsted, but we are confident that this will increase the transparency, which will help you to better understand and follow our business. Then I would like to invite Kristin back to the podium before we start the Q&A.

[Henriette Trondsen, Research Analyst]

Henriette Trondsen, Arctic. First, on Lendo Nordic the margin was somewhat softer. You mentioned that was partly due to higher marketing spending in Sweden. Can you give more color on how much this impacted margins negatively in Q4 and your expectations for margin in the Nordics in Q1?

[Ragnar Kårhus, Chief Financial Officer]

Okay. So I will sort of not give -- don't give any details exactly on the margin. As I said, we have experienced some increased costs of marketing to keep up the sort of the volumes in Sweden, with...

[Henriette Trondsen, Research Analyst]

Can I expect this to continue as well at this level in Q1?

[Kristin Skogen Lund, Chief Executive Officer]

I actually think it's hard to guide on that at this stage.

[Henriette Trondsen, Research Analyst]

Okay. And Finn experienced somewhat softer market than jobs in real estate has -- any color on the development into Q1? Has trends been even softer than in Q4? Or...

[Kristin Skogen Lund, Chief Executive Officer]

No, I wouldn't say they have been even softer. I would say it's pretty much what we saw so far in Q4 is pretty much what we still see.

[Henriette Trondsen, Research Analyst]

And thirdly, on potential M&A opportunities in Sweden. Where do you see the most interesting opportunities? And do you think regulatory will stop you from look into acquisitions in, for instance, real estate in Sweden?

[Kristin Skogen Lund, Chief Executive Officer]

That's hard to say. As you know, we don't -- we no longer do -- we no longer do homes for sale ourselves. So that is a bit of a change in how we are positioned now as compared to the last time. But that's a hard prediction to make, so we'll have to see when that happens. And in Sweden, I think there are many interesting opportunities -- and -- within the traditional classifieds, but also in other segments. Sweden is a country with a lot of exciting start-ups, financial services concepts, et cetera. So I think we can look at various opportunities there.

[Eirik Rafdal, Research Analyst]

Eirik from Carnegie. If I can start with the strategic measures in News Media. And the tighter cost control and potential cost cutting. Could you give any flavor on the size of this? How much of the OpEx base you could potentially take out and we start seeing effects from '21?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. So we're not going to be super specific on that. And as I said, most of that effect will come in '21. But in '20 towards later in the year, it will be in the range of some tens of millions.

[Eirik Rafdal, Research Analyst]

Okay. And also a question on the HQ ramping up a bit on product and tech. Are you guys settling at these levels? Or should we see kind of continued acceleration on spending in HQ?

[Kristin Skogen Lund, Chief Executive Officer]

Do you want to do that one?

[Ragnar Kårhus, Chief Financial Officer]

Yes, I think looking at what we're building up now centrally on those -- in that area. I think we will sort of -- we are roughly -- you will see that we are on the same -- will be on these levels going forward. That's correct.

[Eirik Rafdal, Research Analyst]

Okay. And one final one from me also on M&A. Sonoma, putting their OC assets under strategic review. Are you guys considering kind of generally, assets that are not clear-cut number one players for -- you've been vocal earlier about Finland and it's a fragmented market potential for consolidation, just your thoughts on that?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. I mean, let's just say that Finland is obviously of interest, and we follow that very carefully. And there are many different types of combination that can be foreseen in that market. It's a bit of a puzzle. So we -- let me just say that we follow that very carefully. Question, I think there was one next to him.

[Oliver Schüler Pisani, Analyst of Consumer Goods]

Oliver Pisani, Nordea. Just a quick one on Lendo. I think you're right here that you're going to go for a soft launch in Spain in 2020. And what makes you comfortable that Spain will be a better market than Austria and Poland were?

[Kristin Skogen Lund, Chief Executive Officer]

Right. So our team in Lendo, I mean, they have done extremely thorough research in all different geographies. And they have chosen Spain as they see that is -- it's a favorable combination of the attitude and the willingness of building this market on the side of the banks. We already signed up a few banks, and then it's sort of -- the conditions are favorable. And we will just take -- but it's -- Spain is also, it's not as mature as Denmark. So we will just take all the learning we now have from having expanded into, let's say, a range of markets, some more mature and some more immature and make sure that we tweak and prepare and have sort of an optimized process and an optimized product before we start putting too much money behind it. So we -- Spain is also a country that we know quite well. So we just believe it's the best prospect going forward. It's also quite a large market, obviously. So if you succeed, it could become very interesting.

[Oliver Schüler Pisani, Analyst of Consumer Goods]

And will you remain in Austria and Poland despite the situation?

[Kristin Skogen Lund, Chief Executive Officer]

Right. So for now, we knew that those markets would take time as they're very immature, and it's too early to conclude. As I mentioned, we do actually now see some progress in Austria, which is encouraging. And it's a bit too early to say, but we will, at some point, we will have to make a decision. Is this going to keep -- will it materialize or not. But it's if you want, let's say, be a pioneer and build a new concept in a new market, you have to have some sort of -- you have to have that level of patience if you want to succeed as well. So it's too early to conclude.

[Unknown Executive]

So just a few questions from the webcast. First one on Nordic marketplaces. Can you give some guidance on the margin for Finn and Blocket in 2020 after the decline which we've seen in Blocket and the uptick in Finn?

[Ragnar Kårhus, Chief Financial Officer]

I would say that we normally sort of don't guide on the margin development for Finn and Blocket. So no comments on that.

[Unknown Executive]

And then another question on capital allocation. You commented on that you will complete the buyback program up to 2%. But looking at the valuation of Schibsted ex-Adevinta, you can argue that the valuation is still quite cheap. So do you plan for other buybacks, looking at this? Or what your thoughts here?

[Kristin Skogen Lund, Chief Executive Officer]

No concrete plans for new programs at this stage. But this is a development. We will have to follow, and it will be also up to our Board to have an opinion on that.

[Unknown Executive]

And then maybe one more from the webcast. You mentioned Blocket with having a good trend. The car segment is going well. Can you comment a bit more on what the management of Blocket is focusing on? And what has changed since the new management took over a year ago?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. Sure. So the -- I mean, I have to say, Blocket is just basically splurging with energy, a lot of initiatives going on. In addition to the car segment they are working on, I would say, repaying some technical debt and improving the product overall and strengthening their product and technical capabilities in general. They have also worked a lot on the sales side to strengthen their sales organization. In terms of specific products, they are working on the Casa Concept, which is this full-service rental. They are improving their travel offering, and they are also -- they have also launched and our now building an educational vertical, which is quite exciting. Final thing I would mention is that they're also working on their job product and sophisticating the offering that they have there.

[Unknown Executive]

No more questions on the webcast currently. Do we have more questions here or...

[Kristin Skogen Lund, Chief Executive Officer]

Nope. Okay. Well, thank you so much for listening.