Schibsted ASA

OSE:SCHA

Earnings Call Transcript 2021-Q4

[Jann-Boje Meinecke]

[Presentation]Good morning, everyone, and welcome to the presentation of our Q4 Results. This time, results will be presented by Kristin and myself, as Ragnar, our CFO, is not able to join us due to COVID infection. But there's no reason to worry for him, and he's already feeling much better. At the end of the presentation, we will open for a Q&A session with a hard stop at quarter past 10. And similar to last time, Christian, the EVP for Nordic Marketplaces, will also join us. If you want to ask questions, please go to sli.com and enter the event code which you can see here on the first slide.And with that, let me hand over to Kristin. Please go ahead.

[Kristin Skogen Lund, Chief Executive Officer]

Thank you, and a warm welcome to everybody. I said that before we dive into the quarter, I would like to take a step back and look at the results for the full year of 2021, because financially, '21 marks a strong record high year with underlying revenue growth of 11% and an EBITDA of around NOK 2.7 billion, which is an increase of more than NOK 600 million compared to last year. And in accordance with our dividend policy, our Board of Directors proposed an ordinary dividend of NOK 2 per share for '21.If you look at our operations, we have seen strong performance and good progress across many areas. Nordic Marketplaces delivered extraordinary strong growth this year, driven by jobs following a weak year in that vertical in 2020. And furthermore, our position as the Nordic classified champion was strengthened as Oikotie is now fully integrated in Finland after the acquisitions in the summer of 2020 and the integration of the leading online classified businesses, DBA and Bilbasen in Denmark is well underway following the completion of Adevinta's acquisition of eBay Classifieds Group in June '21.News Media made good progress in the continued transition to a digitally focused news organization and achieved strong underlying revenue growth of 6% as well as significant improvements in EBITDA. And finally, looking at Financial Services and venture, I'm happy to report that Lendo returned to double-digit growth and that we were able to make several attractive venture investments.So with that, let me dive into the fourth quarter in more detail. Overall, Q4 was a solid quarter with underlying revenues being 7% up compared to last year. And EBITDA ended at NOK 634 million, that is NOK 30 million below last year, driven by higher investments across the Group and less remote work. Marketplaces Norway delivered strong year-on-year EBITDA growth of NOK 99 million. And Nordic Marketplaces delivered once again extraordinary strong revenue growth driven by jobs and a very strong performance by Marketplace Norway. In News Media, Q4 continued to be a strong quarter, thanks to strong sales in digital advertising, in particular, VG and Aftonbladet as well as steady growth in digital subscriptions. And moving on to Financial Services & Ventures, Lendo continued to deliver the strong underlying growth, and we had a good deal flow in venture.And lastly, let me add a few comments on Adevinta, which has seen a sharp decline in its share price leading to an impairment in our results. We spun off Adevinta as an independent company in 2019 following the merger with eBay Classified Group, we now own 33% of the company, which represents a significant share of Schibsted's overall market capitalization. We are a large, strong financial owner of Adevinta, and we have 2 seats on their Board of Directors. We built Adevinta over a long period of time, and we base our assessment of its value to us on the company's long-term growth, market position and profitability. And we remain as a committed owner focusing on shareholder value. It is a fact that the sector is out of favor in the financial markets right now, but that does not change the industrial dynamics and business development that Adevinta is involved in. We remain confident that Adevinta is well positioned as the largest pure-play classifieds business in the Western world and strongly support the new strategy, which was presented at Adevinta's Capital Markets Day in November.Now let's have a look at our ESG achievements in the fourth quarter. In 2020, we aligned with the science-based target framework and set targets to reduce our images by 50% in 2030 and become a net zero in 2050. And we have now started to detail out those long-term targets to more short-term goals. And another point on the environmental side is that we have a very exciting machine learning project in Aftonbladet, where we have tried to predict how many newspapers retailers would sell during a given day in order to optimize the number we should print and distribute to retailers to both avoid selling out but also to minimize the waste. Results are so far really promising, both economically and environmentally with reduced paper and distribution costs as well as reduced emissions.And moving on to the societal impact. We have increased our investments in skills development for our employee. We think it's crucial to have the necessary skills for our employees to perform their very best and for Schibsted to be a future-fit organization. As an example, 230 leaders, myself included, are now attending a Harvard online course on disruptive strategy and innovation. And we are learning how to boost innovation and put disruption at the forefront and it is really exciting. We also have a LinkedIn learning program for all our employees where they can attend 16,000 different courses. And in addition, we also have extensive programs on privacy and cybersecurity training.And then if we move on to Schibsted@work. The pandemic has definitely shown us that there is no such thing as business as usual anymore, and we have been forced to adapt to a new world of work. And in Schibsted, we believe in a hybrid workplace environment going forward, whether you work from the office or you work remotely, we will support future work [ sales ] by providing a sustainable environment that nurtures collaboration, productivity and innovation. Traveling less will be central to this, and we believe this will deliver employee satisfaction, high performance and ongoing business growth. And we have now started to test this for 6 months to see what will finally be an optimal way of organizing this future way of work.Connected to this, I am once again very satisfied with the employee engagement survey results. We are delivering beyond our ambitious goal and compared to international benchmarks, we are in the top 10% of the best companies. Related to this, I'm very pleased that we also recently got ranked as the most attractive workplace in the industry in Norway by the recruitment agency test. And we see good traction in talent acquisition now despite that fears for work for talent. However, our employee survey also sends a signal of some distress in our workforce. And I think the pandemic has put strains on people lives. COVID is still very much around us. I think our CFO is a good example of that. And we will have a close eye and be prepared to handle a situation where we, for instance, see an increase in sick leave among our employees.If we look to governance, we are preparing a TCFD report for 2021 that will be published together with our annual report in April. And in the sustainability report for '21, we will also disclose some information related to the EU taxonomy. And lastly, it's great to see that our effort within sustainability is recognized by Sustainalytics, a well-known global sustainability research rating and data firm. They have recently ranked us as top-rated ESG performer in both our industry and our region.Now I will then go more to the numbers, and I will start presenting the development in Nordic Marketplaces. So looking at the financial results for Nordic Marketplaces, Q4 was another strong quarter. As we saw through '21, the revenue growth has been driven by our professional customers and particularly by the job vertical, which continued to see extraordinary volume growth, something which you can also study further in the appendix slide. Following closing, at the end of June, numbers for Denmark are now included in the '21 numbers affecting the growth positively. The 18% revenue growth presented in the left graph, however, is the underlying revenue development, including pro forma figures for Denmark revenues and excluding currency effects for better comparability. EBITDA margin for the segment ended at 38% below last year -- that's below last year, which is driven by lower margins in Sweden and Finland and the consolidation of Denmark, which has lower margins than Norway or Sweden.If we then look at the quarterly performance, Norway really stands out, delivering another exceptionally strong quarter, measured in both revenues and EBITDA, its best quarter in 2021, while Q4 usually declines quarter-on-quarter due to seasonality. While jobs was again the main driver for the strong performance, motors and advertising also contribute to -- continue to grow well in Norway. The increase in motors was driven by Nettbil as well as higher car volumes on Finn and that is quite exceptional if you look at trends in other markets. One key driver for the strong performance in advertising, marking a new all-time high, where the high fill rates in News Media, and that leads to higher ad exposure from Schibsted wide advertising campaigns on Finn where we had available inventory.And travel saw good improvements in the start of Q4, but slowed down again starting in November due to the Omicron virus variants. And this is a setback for postponing the recovery of that vertical, but still Q4 revenues grew by NOK 12 million compared to last year. And similar to last quarter, real estate is the only vertical with declining revenues in Q4. It's mainly driven by lower volume. It has to do with the economic environment and some new regulations that have been introduced. So costs, they increased. It's driven by higher marketing spend and personnel costs compared to Q4 last year. The latter will continue to increase as we have focused on hiring tech resources to drive product development. The EBITDA margin ended at a strong 50% mainly driven by revenue mix with a high contribution from jobs.Then we move to Blocket. And I would like to remind you again that Blocket was not as affected by the pandemic and its restrictions last year and managed to deliver revenues on par with 2019 for the full year of 2020. So you don't see that same rebound effect here as you see in Norway. But similar to last quarter, jobs saw good trends, growing revenue by 65% year-on-year, driven by higher volumes and increased ARPA due to the new price and packaging model, which was launched in Q4 last year. However, a decline in other main revenue streams resulted in a slowdown in revenue growth, which ended at 1% compared to last year. As most other markets globally, motors continue to be affected by the car supply shortage. And despite higher sales from the Bump product revenues were almost flat due to the lower volumes. The Generalist business was affected by lower volumes and the transition to a fully transactional model. To prepare for this transition, prices were simplified and lowered in August, and we have further increased the number of dedicated resources in Q4, working to upgrade the Generalist platform as the earlier investments in the platform have proved insufficient to enable this important transition. And as a result, EBITDA margin declined year-on-year and ended at 40% in Q4.Okay. We move to Finland, where we experienced accelerated revenue growth driven by an underlying 32% increase in online classifieds revenue compared to last year. The 13% revenue growth in the fourth quarter was primarily driven by increased volumes in job, but also real estate and [ Malta ] showed good growth. Looking at our overall target to become the leader in real estate over time, we have made good progress on cross-traffic between Tori and Oikotie. And Tori really has a strong position as the leading Generalist C2C marketplace in Finland with 111 and 6 new approved private adds each day per 1,000 Finn. And that is almost as strong as Finn's position in Norway. And by combining the strong regional traffic from Tori, with Oikotie's leading traffic in the capital region, we have strengthened our offering for our customers and our users. Advertising and other revenues, however, were down year-on-year. Advertising impacted by the ad stack migration to one common platform in Finland and other revenues continue to be affected by COVID in the sense that the business cannot run physical events, which it has depended on.On the cost side, we continue to invest in marketing, primarily within real estate, and we have ramped up product and tech resources to further improve product development. In addition, there was a one-off of around EUR400,000 due to reclassification of capitalized investments in Q4 this quarter impacting EBITDA negatively, and then Q4 last year was impacted by a one-off from -- of EUR600,000 from vacation accruals, which affected EBITDA positively. That means if you look at the year-on-year trend in Q4, EBITDA for the quarter was negatively affected by around EUR 1 million from those one-offs.Then we move to Denmark. And the presented numbers on this slide show a like-for-like comparison, including pro forma numbers for 2019 and '20 before Schibsted took over the ownership. Total revenues declined by 2% compared to Q4 last year, driven by a decline of all main revenue streams as headwinds from market conditions continued to affect the business here. Motor, the biggest revenue source decreased year-on-year by 4%, that's due to lower volumes as the car supply challenges continue to impact the dealer supply However, though, it seems that the declining inventory levels have stabilized somewhat in Q4. And the underlying health for the wheel button platform is strong, and I'll come back to that shortly. Driven by lower shipping revenues, the Generalist business saw a revenue decline of 5% compared to Q4 last year, but that was driven by very strong -- that was a very strong quarter for the Generalist business in Denmark due to the COVID restrictions. So comparing to 2019, Generalist revenues increased by 7% in Q4 this year, the EBITDA margin ended at 24%, and that is quite a similar level to Q4 of 2020.So while the monetization on motors is challenged by the current market conditions, the underlying health of this business is strong. Visits are above 2019 levels and for the latter part of '21 trading -- trending around the strong 2020 level. Bilbasen continues to be the leading site for Danes to search for cars with approximately 90% of all Danes using Bilbasen. Also replies on the platform continued to perform well and remain above both the 2019 and 2020 levels. And lastly, average revenue per listing shows a positive trend, which is reflecting the annual price adjustments as well as the upsell efforts from our own sales team.And then one other piece of information on the marketplaces and something we presented at our Capital Markets Day last year, we have a growth agenda in the marketplaces that builds on 3 pillars. The first one is that we want to leverage our Nordic market positions, driven by the development of better products and value-added services for our traditional online classified offering. The second is by creating new revenue streams from traditional services with a focus on the Generalist business -- sorry, new revenues from transactional services with focus on the Generalist business and the motor vertical. And thirdly, we want to expand and consolidate in the Nordics. And over the last quarters, we have several times talked about the second and the third pillar, the transactional and the Nordic consolidation, but the first pillar remains important, and we still see ample room for product improvements and innovation, making our marketplaces even more efficient for our customers and our users alike. And a very good example of this is what you see now on the slide. It's our new real estate offering, small, medium and large, which we have launched on Finn in Norway. And with more than 3 million people visiting real estate -- the real estate section on Finn every year, it is the go-to destination for people in Norway to buy or sell homes, and it accounts for around 20% of revenues on our Norwegian marketplace.By offering our new packages, which include several new products and services in the medium and large packages, we have simplified the product offering with the aim to increase value for both agents and the home sellers. That means we have changed from an a la carte solution for agents to 3 packages with some opportunities for upselling. Our entry point offering, small still has the same price point and adds size as our previous basic ad offering and has good effect. But for the agents, who want to target even more potential buyers and who want to use Finn to win more mandates going forward, medium and large include additional features with some of them being completely new, leading to a more effective marketplace for agents and users, and I'll give you some examples. Medium has, for example, 80% bigger ads and display advertising in the ad is removed. The ad is also marked as property of the week for 3 days, and information on the particular neighborhood is provided in the ad. And large has the same feature as medium, but the ad is even bigger. The properties highlighted property of the week for 7 days and agents get more data insights enabling them to do an even better job. And we also have a new sold module that helps agents to win new mandates.Agents can choose our package offering for a branch if they, for example, want to adjust for regional differences and can both move upwards and downwards after a certain time. And so far, we are pleased with the development of this new offering, and I'm sure we will come back and talk more about this during the year.So with that, let's move to News Media. And looking at News Media, we are pleased to see that PodMe, our premium audio subscription product continues to grow well. We currently now have 130,000 paying subscribers on PodMe. And we see that the content investments are driving high levels of conversions and increasing subscriber engagement, resulting in steady growth and high retention. Going forward, we will continue to invest in product capabilities and exclusive content to fuel that growth further. And I think as an example of that, we have recently secured the right to license one of Sweden's largest podcast, [ GLC ] and Finland's largest podcast called Pox.If we move to the financial, News Media delivered another strong quarter, driven by solid revenue growth. And as last quarter, it was a positive sentiment in the advertising market in combination with steady growth of our subscription business. Keep in mind that in Q4 '20, News Media received government grants in Sweden. And if we adjust for this and on a foreign exchange neutral basis, the revenue growth would be 7% in Q4. In line with our expectations and signals, costs increased year-on-year in Q4, leading to an EBITDA margin of 11%. The cost increase was primarily a result of a ramp-up in investments in strategic initiatives to fuel revenue growth. I'll get back to that shortly.And in addition, savings from the cost programs were higher in Q4 last year than this quarter, and we see that some of the temporary cost savings related to remote work has started to reverse now. News Media will continue to have a good and healthy balance between cost efficient -- being cost efficient and investing for future growth. If we have a look at our main revenue streams in News Media, let's first look at subscriptions. Total underlying revenues grew by 8% year-on-year in Q4. As in previous quarters, digital subscription revenues continued to grow well, 20% year-on-year, and we are pleased to see healthy growth in our news brands in addition to strong growth in PodMe. As in previous quarters, both strong volumes and growth in ARPU were contributing to that revenue growth. At the end of the quarter, the number of digital subscribers reached almost 1.1 million, and those are the pure digital subscribers.Moving to advertising. We continue to see substantial growth in digital advertising revenues in both Norway and Sweden. And the digital advertising revenues in Q4 were also well above the 2019 levels. There is the positive sentiment now in both these markets. The focus on first-party data across the whole advertising value chain is becoming more evident and chipset is well positioned for further growth in the advertising market as we have access to first-party data through the entire chipset foundation and ecosystem. Video content and premium display were contributing to the strong growth in both markets and our fill rates are record high, benefiting particularly Aftonbladet and VG as they have the largest volume of inventory.And now to secure News Media's long-term final -- financial profitability and safeguard its high relevance for society. The most important matter is the continued transition to a digitally focused news organization with an even stronger emphasis on our subscription business. And as we have previously communicated, content is the core of our business model, and we invest in key content initiatives to fuel the revenue growth potential. Over the last 4 years, revenue from pure digital subscriptions have grown from around $500 million to $1,300 million. And looking ahead, we have set the ambition to further double these revenues over the next 4 years.Podcast, exclusive sports rights and entertainment are key content initiatives, we will continue to invest in going forward to fuel this growth. We see that these content initiatives are well received among our users is driving volume growth, and they're also churn preventive.Okay. Let me then move on to the eCommerce & Distribution portfolio, consisting of the legacy newspaper distribution and the new business operations, which are mainly Helthjem Netthandel and Morgenlevering. After a very strong Q4 2020 and the first half of '21, overall revenue growth for the segment slowed down in Q4, driven by slower partial volume -- sorry, slower parcel volume growth in the market. Especially the first part of the quarter was affected by the reopening of the Norwegian society and that led to slower growth. But Helthjem delivered around 3.6 million parcels, including deliveries to stores during the quarter, that's 8% higher than last year, and that's despite those strong comparables. Revenue ended 5% higher than last year because there was a certain price mix effect.Looking at Morgenlevering, our breakfast and gift delivery service, revenues were down 3%, driven by lower volumes due to the reopening of the Norwegian society. And this is a correction that was expected as mobility starts to increase again. Similar to Q3, EBITDA decreased compared to last year, and that's driven by the higher costs from the move to a new terminal outside of Oslo, which gives us higher capacity to accommodate our future growth. That increased capacity is important to be able to deliver on our growth ambition going forward, but it will impact EBITDA in the shorter term.Then next up is Financial Services and Venture. That consists of brands like Lendo and Prisjakt in addition to other digital services, where we either have a majority or a minority ownership. In this segment, Lendo had yet another strong quarter with 21% revenue growth, while the rest of the portfolio of consolidated companies had a mixed performance this quarter. Overall, revenues were up 1% on a foreign exchange neutral basis. Looking at Prisjakt, revenues declined 9% on a foreign exchange neutral basis compared to last year. That's driven by lower traffic and click revenues. Prisjakt experienced a strong boost from eCommerce in Q4 2020 as a result of the pandemic and the related restrictions. As this effect has declined throughout the year, the year-on-year development shows a disappointing decrease in revenues compared to last year. The revenue decline was somewhat offset by lower costs, and that resulted in a slightly decreased EBITDA margin compared to last year.Furthermore, MittAnbud and Servicefinder delivered single-digit revenue growth in Q4 and Motesplatsen and Let's Deal Group were exited. And on a similar note, we are also planning now for a strategic review of Prisjakt that will take place in 2022. And finally, our Ventures business, which is not consolidated in our results, had high activity in the quarter, and I'll come back to that in a minute.But first, let's dive into Lendo. Underlying revenue growth of 21%, which is very good. This is approximately the same speed as in Q3 and is driven by strong results in Norway and Sweden. And growth is still driven by the demand side of the platform. Overall, the conversion from applications to revenues is lower than we saw pre-COVID, but we have seen signs that banks increase their risk appetite in some markets, making it easier for us to find good offers for our customers. However, we do not believe that we will see as high KPIs as we Prisjakt recovered in our established markets, due to a stricter credit policy by the banks.EBITDA margin was somewhat down compared to the same quarter last year, and that is a continued situation with the marketing spend in Sweden and also expansion investments that were higher than last year. And if we look at '21 as a whole, the EBITDA spend on investment for the geographical expansion and the just under 60 million. These expansion costs are expected to be on a similar level in 2022, but they will be more skewed towards new and improved products in existing markets and less towards geographical expansion.Our Ventures business continued with high activity with several new interesting additions and solid developments of many companies in the portfolio. Overall, 11 transactions remain in Q4, some highlights being an additional investment in Tibber, an energy company, which empowers people by lowering their energy bill and consumption and where we increased our ownership to around 15%. We invested in Firi, the leading Scandinavian trading platform for cryptocurrency, and we exceeded our stake in Capcito to Fortnox with an attractive return. And while focusing on financial returns when doing these investments, they also enable us to be on top of important external trends, increase innovation and transform our own business. And now while we're on the subject of Ventures business, we are currently finalizing our overarching investment strategy, which we started last summer. As part of this, we are consolidating our investment activities into one team as a natural step in strengthening our focus on finding new growth. The overall investment responsibility, including M&A, will be organized under our Chief Investment Officer, Andrew, who joined our team in July.And with that, I'm very happy to stop talking and to pass it over to you on Jann-Boje, and we will come back for questions later.

[Jann-Boje Meinecke]

Thank you, Kristin. I'm pleased to give you then some more details on our financials. Let me start by commenting on the consolidated results for the Group in Q4. Revenues ended at NOK 3.9 billion, which is an underlying growth of 7% compared to Q4 last year, but also 11% higher compared to Q4 in 2020. It's a particular marketplaces, Norway and News Media as described by Kristin that really drove this increase. In the graph on the right, you can see the EBITDA split per segment where Nordic Marketplaces increased by NOK 93 million compared to last year, despite increased costs in product and tech end of the quarter. The EBITDA increase was driven by Finn, which increased EBITDA year-on-year by NOK 99 million, while Sweden, Finland and the HQ in Nordic Marketplaces, saw a decrease in EBITDA compared to last year.Denmark contributed by NOK 30 million, but was not part of the Group in the last year's numbers. As expected, News Media saw a decrease in EBITDA this quarter, driven by investment in strategic initiatives to cater for continued future growth as well as one-off in Q4 last year, which then affected EBITDA positively. ECommerce and Distribution and Financial Services and Ventures also saw a lower quarterly EBITDA compared to last year. The decline in eCommerce and Distribution was driven by higher debt fixed costs to expand capacity and high consultant costs for exploring various e-commerce initiatives. In Financial Services and Ventures, Lendo delivered EBITDA in line with last year's, whereof the rest of the portfolio delivered a lower EBITDA compared to Q4 2020. And this was primarily driven by lower revenues in Prisjakt.Similar to Kristin, let me also spend just a couple of minutes on the full year 2021, which has been a great year with strong revenue growth and EBITDA for Schibsted. All in all, the year ended at NOK 14.6 million in total revenues. And as mentioned in the previous quarterly presentations, Nordic Marketplaces and News Media were the main drivers for the strong development. Here also on the right, you can see clearly the bounce back in Nordic Marketplaces with an exceptional EBITDA increase of NOK 446 million compared to 2020. Finn stands out here as a main contributor with a total EBITDA increase of NOK 402 million for the entire year and Denmark contributed with NOK 56 million to this growth of a new company in the portfolio from 1st of July.When looking at the entire News and Media, we see that they had a really strong year, driven by revenue growth and the margin expansion from the cost reduction program, leading to an EBITDA increase of NOK 212 million compared to 2020. And this is a really big achievement. Both eCommerce and Distribution and Financial Services and Ventures saw a lower EBITDA in 2020, driven by lower -- sorry, driven by a slower second half of 2021 in e-commerce affecting distribution and Prisjakt. Lendo, on the other hand, experienced good underlying revenue growth and increased EBITDA after a slow 2020, which was affected by the COVID-19 pandemic.Moving on to our income statement in Q4. Operating loss for the quarter ended at minus NOK 19.7 billion, negatively affected by NOK 20 billion impairment loss, recognized to reflect the decline in the share price and market value of our holding in Adevinta. Other than the effect of the impairment of Adevinta, operating loss was positively impacted by gains related to the remeasurement of eEducation Albert and the sale of Capcito included in other income.Other expenses mainly related to the integration of the acquired operations in Marketplaces Denmark with minus NOK 24 million and a loss related to the sale of Let's Deal. Please note that also the Q3 results Adevinta is now included in Schibsted's share of profit of joint ventures and associates for Q4 2021, adjusted for amortization of excess value amounting to around minus NOK 105 million.Moving on to operating cash flow, increased 14% compared to Q4 last year, driven by positive development in working capital and reduced tax payments. CapEx was somewhat higher in Q4 compared to last year related to increased investments within product and tech with really Nordic market placing as a main driver, but also office equipment and IT infrastructure across the Group. Our financial gearing continues to be well within our target range and the undrawn facility secures a strong liquidity buffer going forward. I can also highlight that we obtained a public rating of BBB stable by Scope Ratings in August and that we successfully issued a new bond of NOK 1 billion in November. The bond has a term of 5 years and pricing of NIBOR 3 months plus 78 basis points. The consent from our bank for a temporary waiver of our financial covenant still stands until the bridge loan is repaid. After the mentioned bond issue, the Bridge loan was partly repaid with NOK 500 million to NOK 2.8 billion.As usual, I will end the presentation with our financial targets and policies and some comments on the overall outlook. In general, our financial targets remain unchanged. After witnessing resilience during the pandemic and resilience and with an exceptional strong growth in 2021, driven by the rebound of the drops in Sweden, Finland and in particular in Norway, we remain confident in our growth potential for Nordic Marketplaces and confirm our medium to long-term target to grow annual revenues by 8% to 12%. The high growth ambition and the transformation towards transactional marketplaces will require investments mainly related to product and tech as well as marketing spend. As these costs occur, this would temporarily lead to a limited operational leverage across our marketplace business.In Sweden, we expect the margin decline in 2022 compared to the 42% achieved for the full year 2021, driven by a combination of these mentioned investments and a simplified reduced pricing for the Generalist C2C business to prepare for the transformation for a fully transactional model. Based on our strategy and progress in News Media, we expect an annual low single-digit revenue growth in the medium term and an EBITDA margin for News Media in the range of 10% to 12%. The strategic initiatives for News Media, which Kristin presented earlier, will be dilutive to News Media and the margin over the next 1, 2, 3 years with around 2 percentage points based on current plans. As a result, EBITDA margin is expected in the lower end of the 10% to 12% margin range going forward. We are confident that these efforts will strengthen News Media's business and will really be profitable over time.Within the Financial Services and Ventures, Lendo is expected to go well over time as also seen with a good development over the last quarters. Investments and expansion will continue in 2022, and levels will be around at the same level to 2021, which was around NOK 60 million. However, it will be more skewed to new and improved products in existing markets and less towards geographical expansion. As Kristin mentioned in the beginning, in accordance with our dividend policy, the Board proposed a dividend of NOK 2 per share. At the same time, we will also continue to allocate capital into M&A targeted to strengthen our market positions and bolt-on adjacent businesses, which will strengthen our financial results and business over time. In this context, we are also continuing to review our portfolio on a regular basis.Related to this, Prisjakt has a really good performance over the last years with a strong leading position in an industry with a significant tailwind and with several ongoing strong initiatives. However, the price comparison market is still fragmented, and we still see interesting consolidation opportunities, which we want to look into. We are therefore -- we have therefore decided to perform a strategic review for Prisjakt in 2022 with the aim to unleash its full potential.And with that, please let me go over to the Q&A session.

[Jann-Boje Meinecke]

Okay. First question from Adam at UBS. Looking at marketplaces, medium term range in 2022. Do you think that revenue will be in the range of 8% to 12% for the year.I think I can comment is, yes, again, we confirmed our target of 8% to 12% in the medium term. And based on the current plans, which we see so far, we can confirm that 2022 is expected in that range.Also next question from Adam as a follow-up here. In the outlook statement, you spoke about temporary lower margins for Sweden. Was it a comment on 2022 or more in the medium term? II can say for the time being, we don't comment on the margin for specific assets in the medium term, but we were specific here in Sweden in 2022 because we have this transition of higher investments for the transactional business and also lowering prices. So for the time being, this comment is mainly related to the development in 2022.Moving on to eCommerce. Maybe, Kristin, you can comment on this. If you can explain the strategy in eCommerce going forward? And what should drive like a reacceleration for the business going forward?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. First of all, because it's important to remember that this business will an enormous boost during the COVID pandemic and when we are now flattening out, we are flattening out at levels that are very high still, if you compare to 2 years back to 2019. So it's important to remember that you get a bit sort of speedline by that recent development. So we are very confident in this business. We believe that we continue to take share in an increasingly competitive market. We also see that some of our competitors have copied some of the concepts that we were early out launching. But we do have a unique advantage in the fact that we deliver in the night together with the newspapers we are there at the doormat in the morning. That's -- it's a safe delivery. We have keys to all apartment houses, meaning we are at your doorstep. It's very convenient, and it's also efficient given that there is, for example, no traffic in middle of the night, et cetera. So we do believe that we have this strong advantage. So we will continue to build from that. It's also going to be more and more a Nordic game, and we are working on strengthening our position in Sweden as we speak. And hopefully, we will also be able to have good agreements for Nordic setup for customers who prefer to operate on a Nordic level, which many do.And then finally, we are -- we keep working on how we can further expand this position from distribution into more of an e-commerce enablement play. And we have many assets in our portfolio that can play into such a role. So that's very exciting work that we are currently working on.

[Jann-Boje Meinecke]

The next one is from Erik at Carnegie. You call out Nettbil as a positive contributor to growth in Nordic Marketplaces, Norway. Would you be able to disclose the contribution in Q4? And also, if you can give an update on the ongoing case with the competition authorities in Norway? Maybe you can start with the last part, Kristin, then I can comment on Nettbil.

[Kristin Skogen Lund, Chief Executive Officer]

Okay. Yes. What I can say is that we have been in court this week in Bergen in the appeal court, and we -- what can I say, it's impossible to comment. We don't know. We feel we have a very strong and valid case, and we really hope we will come through with that. But we won't know until we have the verdict, which will come in about a month, 1.5 months or something like that.

[Jann-Boje Meinecke]

And then when it comes to the contribution of Nettbil, we haven't like disclosed numbers in Norwegian crowns, but motors increased in Finn in Q4 was roughly 20%. And we can say that 2/3 of that increase is driven by Nettbil and 1/3 roughly driven by Finn. Continuing with a little bit.Next question from Ole Martin at DNB. Can you please comment on how the new regulations for sale of property Norway has impacted Finn? And what do you expect here over the next quarters?

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Right. I can take that. So there is new regulation in Norway now that puts more responsibility on the seller of a property. And that means that sellers will need more documentation on the condition of the property. And that means that you need more support from an appraiser to evaluate the property. So going into the new year with the new regulation, there has been an extreme demand for appraisers kind of limiting the volume of properties in the market. So in the short-term, it has kind of lowered the supply of properties in the market. But we think that is a temporary situation and that it will normalize throughout this year. So I think that's a situation on that.

[Jann-Boje Meinecke]

And then just continuing with Finland and real estate. Next question from Pete-Veikko at Morgan Stanley. For Finn you expect a new real estate pricing model to generate meaningful sales growth for 2022. If you can just -- some indication here, what is the impact of the new packages and new products?

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Yes. I saw there were several questions on these topics and maybe I should give a broader answer to it. I think we have seen really solid pickup rates on these new packages in real estate. So in total, for the year, we think that it will be meaningful for Finn in terms of revenue. And if you live in Norway, you might have seen that there has been some negative press coverage around this that realtors have been negative and so on. But while in fact, when we have done our own assessments, we are, of course, in dialogue with our customers on a day-to-day basis. I think I would like to nuance this picture that there is, in fact, quite a few of our customers that are very satisfied with these new products. So yes, so we are quite satisfied with the launch of this, I would say.

[Jann-Boje Meinecke]

Yes. I can just also address like one comment because there's a question here from Nina, like how much does Finn earn from the new model in general from real estate. I think if you look at the numbers for 2021, you can say the ARPU for real estate is now worth around NOK 1,500 to NOK 1,600 per listing. And like Kristin said, I think we have to come back, but there probably is an impact, but I think we were not ready to say by how much.Moving on to Lendo. Also a question from Pete-Veikko, Morgan Stanley. What is the main reason for making the shift from a geographical expansion more towards like new and improved products?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. Should I do that? I think it's -- well, we are still working geographically in Spain and Portugal, but we are trading a bit carefully wanting to make sure that we have the mix and the relations set up with the banks, et cetera, totally in order before we spend too much on marketing. And that gives us some room to focus on the product expansion possibilities here in the home market in the Nordics, and we see that it is attractive to expand the portfolio. We have already been working on a Lendo for small business loans. We're looking at the credit card market, we could foresee that we would maybe start looking at other types of loans of larger value and that, that could be a very promising way forward for Lendo. So we feel it's worth investing in that.

[Jann-Boje Meinecke]

When I look at News Media, you have been talking about News Media investments and now seek to double-digit publicity revenues by 2025. What type of margin impact should we expect from investment in the short term?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. Well, I think you covered that, but I guess you can say it again.

[Jann-Boje Meinecke]

Yes. So I think we covered it. I think the investments probably impact margin by roughly 2 percentage points, and this leads in way to a margin in the lower end of the 10% to 12% range in the next 1 to 3 years.Yes, Christian, a question for you from Annick at Exane Paribas. Can you update us on the integration process in Denmark, please?

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Yes, certainly. I would say that the integration process in Denmark is progressing well and mostly according to plan. But I would also like to add that it is a quite complicated process, more complicated with Denmark than we experienced with Oikotie, as an example because the Danish business was more integrated into eBay than Oikotie was integrated into [indiscernible]. So it's a complex project, but progressing according to plan.

[Jann-Boje Meinecke]

Then a couple of questions on Finn again. First one, C2C transaction revenues, you mentioned here that over the last quarters, you're working on this, maybe you can just give an update what is happening in Finn. And when do we expect like a revenue impact here in 2022?

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Yes. So we have ramped up efforts in C2C transactional space in Finn in the Generalist business, we ramped it up quite significantly. And we actually launched in one category this week in children's clothing. So that's the beginning of it. We are testing it out now category by category to learn, and we will expand as we become more and more confident that the solution is working as we intended to -- and most likely, we will see higher volumes in the second half of the year. First half year will be more limited, but we expect pickup in the second half. But when it comes to revenue, I think we have said before, and I can say that again, that we don't expect material impact on revenue this year.

[Jann-Boje Meinecke]

Okay. Then continuing a bit with Finn and Real Estate. A couple of questions on that today. So a follow-up, you mentioned like good pickup rates on the medium and large packages for Finn real estate. Would you be able to disclose like what is the percentage between medium, large and small? And also like another question, I think, on the blended ARPU for the new packaging, I think we said we will not comment on this at this stage, but maybe you can comment a little bit on the different like mix between the packages? And also like how is it possible to go up or down in that package structure?

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Yes, I don't think I would give specific numbers on large, medium and small. But I'll just say again that we are satisfied with the pickup rate of the large and medium packages. Feedback from agents is that they see value in having larger objects. They see value in these services that Kristin explained very well in her presentation, like to be in property of the week and the new Insight products and so on. So we're satisfied with it. But I -- but we are also kind of tuning it because it's still -- it's only been live 1 month. So I think I will have to [ agree ] with that.

[Jann-Boje Meinecke]

Then a question from Karl here on eCommerce and distribution. Have this slowdown revenue growth for this segment affected your view on the future growth for eCommerce and distribution. And on the same topic, how does the competitive situation look like for this segment? And how it has shifted further competition in the e-commerce business?

[Kristin Skogen Lund, Chief Executive Officer]

Yes. Well, I think I covered some of that earlier in my answer, but -- and I think it's important, again, to realize that we come from a period of extraordinary growth. So leveling out, we're still at high levels. But -- and of course, there's been some sort of reaction now that everybody starts moving out again. You don't have that same tailwind that you had. But the underlying trend is that e-commerce will remain strong and will continue to grow. We believe in that. We believe that we are still gaining share in this market, and we believe that our unique position delivering at night and in the morning is a good way forward. We also think that it could be possible for us maybe to complement that proposition with -- partnering with others in broadening our offering. They will have to come back to see if that is something we should pursue. And again, the real interesting thing here is if we manage to take some steps up the value chain and move more towards an enabler position, I think that can be really interesting. So yes, it's competitive. It's more competitive than it was. We see that some of our concepts are being copied, but we believe we are in a very strong position to grow this further.

[Jann-Boje Meinecke]

And quite some questions on margins in Nordic Marketplaces. So I'd just like to try to summarize a little bit the questions and to comment on it a little bit. And Christian, if you want you can add some commentary as well. I think all of the questions like do we expect Nordic Marketplaces margins to increase in 2022 or decrease? And can you comment on the impact you expect from inflation in the tight labor market?I think in general, we said like for Sweden, we believe the decline in 2022 due to the combination of both like investments in the transformation of the business and also the platform and like lower revenues due to the pricing changes for the Generalist part. And we also said there's like limited operational leverage for Nordic Marketplace. And I think if you combine these 2 comments, I think we can expect the margins go down in 2022 in comparison to 2021.And I think also the question like, why is Sweden special? Why do we call out Sweden here in the outlook?Again, it's with a combination that we both invest but also have like lower revenues to do the change with the upfront listing fees. It's nothing which we have, for example, in Finn or the other Nordic businesses, where we don't have this upfront listing fees for the Generalist business.And also like an additional question on this. I mean [indiscernible] you guide that investments will increase and margins will go down. If you can comment a little bit on the mix effect between like impact from lower revenues and increased costs for product and tech and marketing.I would say it's a combination of both without disclosing the details, but I know, Christian, if you want to give some more color what is to be done in investing in the platform or -- yes.

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Yes, I think it's fair to say that when we have ventured into this whole area of C2C transactions -- the more we have worked on it, the more we have seen that this is a huge potential, first of all, but it's also more complex than we anticipated at the outset of this journey. So that's why we are ramping up our investments. We have invested in the Pocket platform before also, but we have realized that in order to really solve this, that wasn't sufficient. And now we have decided that we need to do further investments in that area to really prepare for this C2C. This is C2C transformation, yes. So -- but we're really excited about the opportunity here. I want to stress that.

[Jann-Boje Meinecke]

Maybe the last question then for Sweden, again, but the question is like, okay, you said, okay, margins will be lower than the 42% in 2021? Should we expect margins to be below the 40% in Q4 or in line with that?I think based on current plans, we could end below 40%. I think that's what we can say.Moving on to News Media. There's a question. Personnel costs were up 10% year-on-year in the fourth quarter. Should we expect this trend to continue.

[Kristin Skogen Lund, Chief Executive Officer]

Well, on the personnel cost, first, you see that there is a correction from the fact that in Q4 '20, we have the coverage situation. We had, for example, cut bonuses and incentives and things like that and had some savings from remote work. So that's part of it. But then most of this is due to the fact that we have invested in new initiatives. We have hired people in podcast, in E24, our economic service. We have also boosted our regional coverage in Oslo, Bergen and Stavanger through Aftenposten, Bergens Tidende and Stavanger Aftenblad. So I think that explains it in addition to that, there's been a general inflation and salary and hence, the salary increase.

[Jann-Boje Meinecke]

And I think we can also say for News Media, we have been quite explicit that margin is expected to be lower end of 10% to 12%. So I think that was like a good indication on the cost development in 2022.Moving on to Prisjakt. Jamie from Berenberg. Will you be continuing as usual with Prisjakt until the view has been completed? Or will you -- will you be reducing investments in the meantime? Is there something you want to comment on Kristin?

[Kristin Skogen Lund, Chief Executive Officer]

No, why don't you take that one?

[Jann-Boje Meinecke]

Yes, I think for the time being, I think we still see like several options for the business. So for the time being, we believe focus on the potential with Prisjakt and continue as we've done over the last quarters. And I think we also said that despite like the slowdown which we've seen over the last quarters due to like changes in the market after like a strong Q4 last year and Q3 due to COVID, really see potential going forward and work like on different initiatives to grow that business going forward.Not so many questions again currently. One is on Nordic Marketplaces HQ where costs were quite up in Q4 compared to the last quarter. What's the reason for this? And is like the NOK 30 million in EBITDA loss, the new run rate going forward.

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Yes, I can comment maybe briefly on the backdrop here. If you look back, Nordic Marketplaces was, let's say, a pure holding structure in a way. But now where we have a full Nordic footprint, we have said that also has some of the rationale behind the acquisitions in the last couple of years that we want to leverage the Nordic scale. And as a result, we are building up some structures to really get collaboration and the synergies and so on across the marketplaces. So that's the reason behind it. Yes.

[Jann-Boje Meinecke]

And I think based on numbers question, the one that I think probably like Q4 is a better run rate going forward based on what Christian just described.Yes. I think that concludes the session, I can just quickly check if there's someone raised a question on my inbox and not coming into sli.do. No, I think that was the last question for today. Then from my side, thank you very much for participating, and talk to you soon.

[Kristin Skogen Lund, Chief Executive Officer]

Thank you.

[Christian Printzell Halvorsen, Executive Vice President of Nordic Marketplaces]

Thank you.