Schibsted ASA
OSE:SCHA
Earnings Call Analysis
Q3-2023 Analysis
Schibsted ASA
Schibsted has demonstrated prudence in its third-quarter ventures, even as it faces a global economic downturn. An overall revenue uptick of 1% was achieved, reaching NOK 741 million EBITDA—a 13% increase from the previous year, thanks to notable growth in mobility, real estate, and recommerce verticals within its Nordic Marketplaces, offsetting setbacks in the jobs sector.
Diving deeper into sectoral performance, the mobility sector came out strong with an 11% growth rate, largely attributed to the foreign exchange neutral revenue in light of increased transactions and higher average revenue per car. Real estate thrived with a 25% growth in revenues, bolstered by stable volume development and ARPA (Average Revenue per Account) growth. Challenges in the job vertical led to a 9% decrease in revenues, primarily within Norway's job market—Schibsted's largest revenue generator for this vertical. Recommerce displayed a solid 37% growth with classifieds surging by 63%, and despite a 10% decline in advertising revenue within this vertical, EBITDA saw improvements compared to the previous quarter.
A strategic 10.1% investment in Viaplay speaks of Schibsted's opportunistic approach to influential Nordic platforms, despite the risk involved. The ongoing negotiations regarding a potential transaction of Adevinta and its ownership discusses further positions Schibsted to proactively adapt and thrive amidst market uncertainties.
Strengthening News Media, Schibsted has embarked on a cost optimization journey tailoring efforts to mitigate the expected tumultuous market conditions, aiming for an EBITDA margin between 10%-12% by 2024. Though absolute cost reductions are not expected, a strategic approach towards cost moderation and efficacy in capital allocation is imperative for maintaining growth and profitability in this changing climate.
You don't have any saved screeners yet
Good morning, everyone, and welcome to Schibsted's Q3 results presentation. With me today is a new member in the leadership executive team, Per Christian, our new CFO, who has started as onboarding in September and took over in October. And Kristin and Per Christian will present the progress and results for the third quarter as usual. Afterwards, we will also have a Q&A session where Per Christian, our EVP for Nordic Marketplaces in delivery will also be here. And as usual, we can ask questions on slido.com.And with this, I hand over to Kristin.
Thank you, Gamboa, and a very welcome and good morning to everybody. I will start with the highlights before we have a closer look at the development in the third quarter. And despite the challenging macroeconomic environment, I am happy to report that Schibsted has navigated the rough seas well in the third quarter, delivering an underlying revenue growth of 1% and a group EBITDA of NOK 741 million, which is 13% up from the same period last year. Driven by a strong top line growth in the mobility, real estate and recommerce verticals, Nordic Marketplaces delivered robust underlying revenue growth of 10% in the third quarter despite continued market headwinds in the job vertical.Following a year-on-year decline in Nordic Marketplaces EBITDA over the last few quarters, EBITDA ended 4% above last year at NOK 504 million. News Media's profitability improved considerably compared to Q3 last year with an EBITDA of NOK 168 million and 9% margin. The improvement was a consequence of cost reduction measures as revenues in our news media operations declined by an underlying 2%. Following several quarters of solid revenue growth and improved profitability, performance in growth and investments in Q3 was affected by declining revenues in our Swedish Lendo business, driven by the challenging macroeconomic factors and also somewhat softer trends in Prisjakt.Against the backdrop of our long history of investing in companies closely related to our core business and of seizing opportunities which arise in more uncertain times, we have in Q3 acquired a 10.1% in Viaplay, a leading Nordic entertainment platform. And Per Christian, he will come back to this investment and the situation in Viaplay later on in his part. And then lastly, related to our Adevinta ownership, we are as disclosed in the financial mar -- to the financial markets on the 21st of September, involved in discussions regarding a potential offer for all shares in Adevinta. Schibsted has expressed its support for the proposal and has shared its expectation that if the transaction goes forward, it would retain part of its current shareholding. These ongoing discussions are in line with our prioritized options for Schibsted's ownership in Adevinta, which have been previously communicated to the financial markets.Further, the current discussions are based on tremendous efforts over a longer period of time to find an optimal solution for Schibsted and our shareholders. At this point, we are not in a position to provide any further comments and we'll come back with more information when appropriate. We are enthusiastic about the potential transaction, but stress that discussions are still ongoing, and there are no assurances that the transaction will proceed. And now let's take a look at our ESG highlights in the third quarter, starting with the environmental impact. First and foremost, I am proud to announce that our recommerce services in Blocket and FINN reached an all-time high in August in terms of the number of transactions. This is a testament to the trust our users place in our services and the ongoing rapid growth and interest in second-hand items.Furthermore, we have completed the relocation of our delivery terminal and printing facilities from Oslo to Wesby, just outside Oslo. And this strategic move is a significant step for our businesses and has a profound impact on the environment. The relocation will lower energy consumption by an impressive 27% by 2025 compared to the base year of 2018. It also plays a crucial role in our commitment to cut our energy consumption by 50% and reduce our climate impact by 55% by 2030. And then moving on to the societal impact, on the policy front, the European Parliament approved revisions to the European Media Freedom Act, which we have actively supported. The proposal clearly emphasizes the societal value of our free and independent media outlets. We particularly welcome the strong stance on safeguarding strong editorial independence from owners, protecting editorial content on social networks and assessing the impact of very large online platforms in any media merger. I would also like to share the value that Lendo provides to consumers during economically challenging times like these, our financial service empowers consumers to compare and access consumer credits. An indicative calculation shows that by bringing transparency on consumer credits to users, the service has in '23 so far, helped consumers save an amount of NOK 380 million in interest expenses, and this truly demonstrates the marketplace's role in creating trust and transparency in the market.Concluding the ESG section, I'd like to share that we continue our strong efforts to explore all the opportunities arising from the technical advancements of AI and large language models. Our brands are continually experimenting, and we are building a robust internal knowledge base. For example, more than 800 employees have now completed our AI boost training. And continuing on a positive note, I'm happy to share that we maintain or improve our ESG rating. Remaining a constituent of the FTSE4Good Index, we are also rated as both an industry and regional leader by Sustainalytics and hold an AA rating from MSCI.So with that, let me then go over to present the developments of our business in more detail. And first up is Nordic Marketplaces. Driven by solid growth in classified revenues, Nordic Marketplaces delivered a foreign exchange-neutral revenue growth of 10% in the third quarter. This was primarily driven by the mobility and real estate verticals in all markets and solid growth in transactional revenues in e-commerce. The growth was partly offset by the job vertical, which saw a continued volume decline due to the market headwinds. Advertising revenues continue to be affected by market headwinds, however, with some improvement compared to the previous quarters. EBITDA increased compared to Q3 last year, driven by revenues, while margin was affected by a change in revenue mix and increased costs from new hires last year to drive new business models and the transition to our new vertical-based operating model.And then let's take a closer look at our 4 verticals, starting with mobility, which is the biggest one in terms of revenue and EBITDA. And first, we will review the underlying classified revenue drivers in all markets. Transactional models like Nettbil and Autovex are excluded from these KPIs as they have different business models. In Norway, professional volumes continued to grow at the beginning of the quarter. However, growth slowed down in September, mainly due to strong comparables from last year. In total, professional volumes ended up 7%. Private volumes, on the other hand, have been more volatile, experiencing a 9% decrease in the quarter. The positive ARPA development in Norway was driven by regular price adjustments. Similarly, in Sweden, professional volumes saw a solid growth of 16%, while private volumes experienced a decline of 7%. ARPA development in Sweden was driven by regular price adjustments, although more than offset by lower adaptation of the upselling products. And in Denmark, we have a different business model where we monetize listings per day. Denmark continues to show strong volume growth and the supportive -- no, sorry, and the positive ARPA development was driven by price increases and product mix.If we then look at the financials, the mobility vertical saw robust revenue growth across all markets in the quarter as foreign exchange neutral revenues increased 11% compared to last year. And net bill continued to show good growth of almost 40% in the quarter and had an all-time high revenue in September, just above NOK 30 million. The growth was mainly driven by increased volumes, but average revenue per car was also showing healthy growth. Autovex is part of the reported figures in Q3 '23, and the development was as expected, even if the macroeconomic environment is more challenging now in Finland. And excluding Autovex in the Q3 numbers, classified revenues grew 13% on a foreign exchange neutral basis in the quarter. Mobility and Recommerce have the highest share of advertising revenue in our Marketplace business. The macroeconomic conditions continue to impact the advertising market. However, we saw advertising revenues somewhat improving compared to the previous quarters with an increase of 1% year-on-year on a foreign exchange neutral basis and total cost increased year-on-year. That's driven by the new hires during '22 and investments in new initiatives such as Nettbil and Autovex. EBITDA increased 11% compared to Q3 last year, and that's driven by the higher revenues and margin was strong with 53%.Then we move on to the job vertical. In Norway, we have successfully integrated the sourcing of ads from the governmental employment service NAV into our service and this integration has greatly improved the candidate's overview of the alternatives in the job market. And it is important to note, though, that the volumes generated from sourced ads are not included in the NNAs displayed on this slide. We continue to see an accelerated decline in the volume of paid ads in both Sweden and Finland in the quarter. This decline is primarily driven by market challenges and the macroeconomic environment in these countries. And compared to Norway, Sweden and Finland have higher unemployment rates, so the volume decline is particularly challenging in these markets.In Norway, we also faced market headwinds impacting volume development. Nevertheless, there has been some improvement compared to the second quarter. The growth in ARPA in Norway and Finland was driven by regular price increases and upsell products, while in Sweden, ARPA growth was solely driven by the upsell products. On the finances, the weaker macroeconomic environment predominantly affects jobs, as I mentioned earlier. Price adjustments and increased revenues from upselling products led to a significant increase in ARPA partly offsetting the impact of the decreased volumes. Nevertheless, market challenges resulted in a revenue decline of 9% compared to last year on a foreign exchange neutral basis. And as many of you know, Norway is the primary contributor to the job vertical, accounting for more than 80% of Classifieds revenues in the quarter. And despite the 15% decline in volume, revenues in Norway only decreased by 4% year-on-year, thanks to the robust ARPA growth. EBITDA was impacted by the lower revenues and increased costs due to new hires in '22 and decreased by 21% compared to last year.And with that, we move to real estate. And as mentioned earlier, we have seen that listings are countercyclical as, for example, republications increase during economic downturns. And as such, the business model for real estate has historically been rather resilient in challenging macroeconomic environment. In Norway, volumes have shown steady growth in line with the overall market. ARPA has been consistently improving in Norway due to regular price adjustments and the introductions of the new package model in early '22. Furthermore, the increased use of upsell products has also been contributing to the ARPA growth. In Finland, we are once again pleased to report continued robust growth in volumes. And similar to previous quarter, growth was driven by rental listings rather than sales listings mainly due to the current macroeconomic environment there. So ARPA and Finland was primarily driven by price adjustments, while the mix of houses for sales versus rental ads more than neutralized the overall effect of that ARPA increase.Real estate had yet another exceptional quarter, experiencing a 25% foreign exchange-neutral revenue growth. This growth was primarily driven by stable volume development and continued ARPA growth in Norway. Norway is the foremost revenue contributor to the real estate vertical, representing more than 80% of the classified revenues in the quarter. In Finland, we are pleased to see an accelerated progress in terms of brand awareness and traffic, which can be attributed to our intensified marketing efforts. Our rental platform, Qasa in Sweden, continues to show solid growth in its main KPIs with growth in signing value being the most important one and we also did a soft launch of Qasa in France in August. EBITDA increased year-on-year, driven by the strong revenue growth, partly offset though by increased costs from new hires during ‘22 and also the investments in Qasa.Lastly, within marketplaces, we have re-commerce and we currently have a transactional model in Finland -- no, sorry, in Norway with Fiks ferdig and in Sweden with [indiscernible]. The 2 key metrics to follow the development in our transactional re-commerce model are the number of transactions completed on the platform and the average order value of the transacted goods. And if we start with Norway, we launched Fiks ferdig in the summer last year. Our users completed around 509,000 transactions through our platform during the third quarter this year. The average order value was at consolidated levels of NOK 667, which is in line with the second quarter. And in Sweden, we launched a transactional model in late 2022, and the number of transactions continues to grow steadily. The average order value is higher in Sweden than in Norway, reflecting that more electronic goods are transacted on the Swedish platform, while fashion is the most significant contributor to the transactions in Norway. And for re-commerce, the main driver for revenue growth is the transactional business where we continue to see substantial development in Norway. As previously communicated, we are experimenting with different monetization methods, and we see solid development in unit economics, both in Norway and in Sweden. Total foreign exchange-neutral revenue growth for the quarter was 37%, driven by an impressive growth of 63% in classifieds. B2C revenues were growing across all markets, and I am pleased to see continued growth in professional revenues in both Finland and Denmark.Recommerce together with Mobility has the highest advertising revenues in marketplaces. In Q3, the advertising market was still affected by the challenging macroeconomic conditions, but with some improvements compared to the previous quarters. Advertising revenues declined by 10% year-on-year in this vertical on a foreign exchange neutral basis. And EBITDA for the quarter ended at a loss of NOK 6 million to7 million, which is somewhat improved compared to previous quarter, reflecting the accelerated growth in transactional revenues. Continued investments in the new business model and the impact of cost increases from new hires during '22 offset some of the revenue growth effect.All right. Then let's go to News Media. Our media outlets, as always, are making their impact through both breaking news and investigative journalism. In recent weeks, our News Media outlets have delivered extensive coverage of the conflict in the Middle East with some even having a significant physical presence in the conflict zone. And during the past quarter, our newsrooms have made several investigations of public interest like Svenska Dagbladet with their undercovering of the inner workings of the gang criminality in Sweden. OrlacE24 did through revealing extensive stock trading by Norwegian politicians and their spouses, raising concerns about potential conflicts of interest.Now over to the financial results of the third quarter, driven by an improved cost development, News Media experienced a significant profitability improvement compared to last year. This was despite continued market headwinds with digital advertising in Sweden and a continued decline in the print business. In Norway, however, we saw a strong performance in digital advertising revenues in the quarter, returning to growth compared to last year. Overall, this led to a total foreign exchange-neutral revenue decline of 2% compared to last year. On the cost side, News Media saw accelerated effect from the cost program and despite a high inflationary environment, the cost levels declined with 5%, contributing to a considerable EBITDA improvement compared to last year. And if we then take a closer look at our main revenue streams in News Media, we see that digital subscription revenues showed solid growth of 13% on a foreign exchange neutral basis. And this increase was driven by improved ARPU combined with high volumes and continued growth in PATMI and News Media's all access bundle products.Moving to advertising. Revenues continue to be affected by a challenging and volatile advertising market. The conditions in Sweden were still tough with a decline of 19% in digital advertising revenues in Q3. However, that decline was cured by the strong digital performance in Norway in the quarter. And then next up is Delivery, where revenues decreased 4% in the quarter, driven by a continued decline in more levering due to changes in consumer shopping behavior, combined with the lapse of the Sunday edition and distribution. Helthjem Netthandel on the other hand, grew 17% in the quarter, and that's despite a declining e-commerce market due to increased volumes in B2C combined with higher CTC volumes related to FINNS transactional Recommerce offering Fiks ferdig. EBITDA was breakeven in the quarter, and that is an improvement compared to last year and previous quarter, driven by the improved profitability in Helthjem. And then next up is growth and investment, consisting of brands like Lendo and Prisjakt in addition to other digital services where we either have a majority or minority ownership.The total consolidated revenues in this segment decreased 3% on a foreign exchange neutral basis. That's driven by declining revenues in Lendo due to continued market headwinds in Sweden, and I'll come back to that on the next slide. But this was somewhat offset by continued revenue growth in Prisjakt despite the tough e-commerce market. However, the growth was at a somewhat lower level compared to previous quarters and increased 5% on a foreign exchange neutral basis, primarily driven by click volumes. EBITDA declined 13% compared to last year, again driven by the revenue decline in Lendo and lower profitability in the rest of the portfolio. And then a closer look at Lendo, where we experienced a record number of loan applications in the third quarter and revenue growth in Norway and Denmark was strong. However, within consumer loans in Sweden, we continue to see reduced conversions from application to payout as the macroeconomic environment causes banks and borrowers to be more cautious. And as a consequence, Lendo's revenues declined in the quarter. The new product verticals like credit cards in Norway and business loans in Sweden, they continue to grow well. And in total, revenues in Lendo Group declined by 7% compared to last year on a foreign exchange neutral basis. However, the revised strategy with refocus on Scandinavia ensured that profitability was overall maintained with an EBITDA margin in line with last year.And with that, let me hand over to Per Christian Morland, also called PC, who took over as CFO on October 1. So welcome to the stage, PC.
Hello, everyone. Good morning, and my name is Per Christian, but please call me PC. Great to be finally here, as Kristin said, and I'm happy to present to you some highlights of the financial results for the third quarter. I will start my part of the presentation by giving a quick summary of the consolidated results for the group. Overall, foreign exchange neutral revenues for the quarter ended, as Kristin mentioned, 1% above last year, driven, and this is despite a quite challenging macroeconomic landscape. This is driven by the 10% growth in the Nordic marketplace business, while the other segment has seen a decline in revenues.On the cost side, we continue to see effects from the focus on profitability across the group and group EBITDA ended at NOK 741 million or 13% up versus last year, mainly driven by News Media. Our operating profit for the quarter ended at NOK 420 million, up 23% from last year. Driven by higher EBITDA and less negative other income and expenses, only partly offset by a slight increase in depreciation, amortization cost, and impairment loss. Items below operating profit are, to a large degree, impacted by our ownership stake in Adevinta. Firstly, share of profit and loss from joint ventures and associates include Schibsted share of Adevinta results for the second quarter, adjusted for amortization of excess values and fair value differences. Schibsted share of profit ended at NOK 56 million.Secondly, the third quarter, we saw an increase in the share price of Adevinta from around NOK 70 at the end of Q2 to NOK 106 at the end of Q3, which led to a reversal of previously recognized impairment losses of around NOK 13 billion. Thirdly, the total return swap related to Adevinta also was affected by the increased share price, leading to a gain of NOK 1.3 billion recognized under financial income in the quarter. Financial expenses, on the other hand, includes a loss of NOK 96 million from the total return swap linked to our investments in Viaplay. In totality then, net profit for the group ended at around NOK 14.5 billion in Q3. Operating cash flow in the quarter improved by NOK 93 million or 21% versus the quarter last year, roughly equivalent to the increased EBITDA of NOK 96 million. CapEx in Q3 ended at NOK 211 million, down 11% from last year. CapEx this year includes significant investments into the development of the new shared technical platform in Nordic Marketplaces while CapEx last year was somewhat higher investments into the next-generation marketplace initiatives and investments into a new common ERP solution. Schibsted has a well-diversified loan portfolio, both in terms of majority profile but also lender sources. After several activities during the first half of this year, no such activities has been made during the third quarter. However, a bond with a net amount of NOK 450 million has expired 23rd of October has been fully repaid at maturity date. Schibsted launched a share buyback program in December last year, buying up to 4% of the total outstanding shares at a net amount of NOK 1.7 billion. The program was successfully completed in September in totality buying 3.9% of the total outstanding shares at a cost of NOK 1.7 billion. The liquidity impact in the quarter related to the program was around NOK 560 million. Our financial gearing increased slightly to 2.47x during Q3, mainly explained by the mentioned share buyback program.As a reminder, Schibsted has a revolving credit facility of EUR 300 million, which is not drawn and secure a good liquidity buffer going forward. Further, Schibsted owned 28% of Adevinta, which contribute to a very solid financial situation. Then a quick recap of our medium-term target and some high-level comments on the outlook. I reiterate that these are medium-term targets, meaning ambitions over a period for up to 3 years and that we do not give concrete guidance on the expected performance for the current year. Our financial vertical focus targets for Nordic Marketplaces, which we introduced at our Capital Market Day in March remain unchanged. For News Media, the ambition of low single-digit revenue growth and an EBITDA margin of 10% to 12%. Like have said previously this year, News Media will be below the EBITDA range in '23, but the ongoing cost program, bringing -- should bring the margin back into that range of 10% to 12% in 2024.In the context of continued market headwinds within our print business and advertising, we will continue to monitor closely the financial performance of News Media and proactively consider the need for additional cost measures. Then some short comments on Q4 and the trends we have seen so far in October. In Nordic Marketplaces, overall trends so far is a bit weaker than what we saw in Q3, but remember that we're only a few weeks into the quarter. In News Media, we expect continued solid growth in the digital subscriptions while we also expect a quite challenging and volatile advertising market to continue in the fourth quarter. Lastly, within growth and investments, we expect the Lendo will be affected by the macroeconomic factors in the shorter term, both in Sweden and in Norway.Lastly, before we go into Q&A, and I invite Kristin and Christian to join me. Let me briefly comment on Adevinta and Viaplay. On the Adevinta ownership, discussions are still ongoing, and we are bound by strict confidentiality undertakings. As such, we are not in a position to provide any further comments today. However, we look forward to coming back with more information when appropriate. Looking at Viaplay, the situation is expected to give structural changes in the Nordic media landscape. Our initial financial investment in the company, which we announced in September should be seen both as a defensive and an opportunistic move with a higher-than-normal risk profile. It enables us to get the seat around the table to gain deeper insight and evaluate our options. As Viaplay disclosed on Monday night, we are involved in discussions regarding a potential recapitalization of the company. We will carefully evaluate all our options as we view the situation of the company more complex than we anticipated at the time of our investments. We do not have any intention to take control of the company. And at the current stage, we have no intention to allocate significant capital in a potential recapitalization. And with this, I suggest we start the Q&A. Gamboa.
Thank you. So just a short follow-up on which I got from e-mail on your comment on Viaplay. Can you elaborate what you mean with significant here?
Yes. So I think significant or looking in 2 different aspects. Significantly is that on one side, we don't have any intentions or plans to allocate billions or billions of capital into Viaplay. On the other side, the situation opens up for opportunities if we see them as financially attractive. So we don't want to really sort of close the door fully, but leave it a bit open.
Okay. And then we can start with Adevinta, obviously, a few questions here. So I'll just start to summarize a little bit. I think first, if you can explain a little bit what the rationale for Schibsted to retain a minority stake in a private company as people were thinking the priority was to reduce our exposure in the company. And then also related, if we're still considering a possible spin of the stake or other alternatives like a salon in the market?
Right. So we cannot comment on any details of the deal or nor can we comment on sort of the deliberations we have made in structuring that deal. But all I can say is that we have kept our optionality along the way, and then we will see what happens, and we look forward to providing more information when we're able to do so.
Then maybe going over a little bit to Nordic Marketplaces. There was like a piece in the Norwegian news these days, commenting on a cost synergy program of NOK 500 million in Nordic Marketplaces. Can you comment on that, Christian?
Yes. That refers to an internal communication. We communicated at the Capital Markets Day in March that we are on a Nordic verticalization journey. And this program is in line with the strategy we laid out at the Capital Markets Day. So the reason for doing this verticalization is to provide better value to users and customers, but also to get more economies of scale, and this cost synergy program is a way to realize that value. It's also now in a situation with higher macroeconomic uncertainty, a way to make certain that we also deliver on the medium-term targets. But you should not expect to see, let's say, overall absolute cost reductions. This is more an initiative to shift resources within Nordic Marketplaces to new initiatives with great growth potential.
And then maybe then staying with like new initiatives and growth potential. There is like a new CEO in deal, which was announced. Should we expect any changes going ahead to when it comes to Netbil?
So we are excited about the C2B model. So you should expect Nettbil to be a growth company also going forward. We have also invested in AutoVex as you know. And these 2 companies have different strengths. So one thing we should expect going forward is that these 2 companies will learn from each other. AutoVex is slightly better on automation, Nettbil is better at monetization. So that's one potential area that will can gain some additional strength from.
And maybe going back a little bit to Viaplay. We're stating today in the release that we have like a long history of investing in companies closely related to our core business. Can you give some details on this and clarify what kind of potential synergies you see with the news business? And if we see the financial Viaplay still is financial.
Do you want me to take that?
I can start -- and then you can chip in.
Sure.
The long -- I mean, first of all, media is part of our core business. So that's important to mention. Second is, when we go into whether there are synergies here or not. I mean if you go back to what I said in the presentation, you should see this as one side is the defensive move in order to protect our values and our positions that we have in Norway and Sweden because we expect that there will be structural changes from this. So that's on the one side. Then the other side is also an opportunistic mode because we -- at the time of the investment, we also expect there to be structural changes that we could look at, consider that it could have a value going forward. I don't think we should go into detail today into more specifics of what that could be since we are in the middle of this process.
No, the only thing we could say is that the Viaplayportfolio is quite complementary to ours where we are strong on news and text, and they are strong on sports, entertainment and audio and video. So there is a potential much to be found there.
And then maybe someone to start a little later to the Q&A. So the question comes again PC. You mentioned not investing significant capital to the company. Can you just once again say what is significant capital for Schibsted in this context as to make sure that message is out there?
Yes. I'm not going to give you an exact number, Gamboa, but I think it is, again, just to repeat, it's important that we are not talking billions or billions right? So that's one, there has been some, let's say, rumors and concerns in the market that we will invest a significant amount of capital. That's not our intention, and that's not what we plan to do. At the same time, as I said, we should not sort of fully close that door given that we are in this restructuring process, and there might be opportunities that we view as financial very attractive. So that's why we're keeping it on that level. I think we should limit ourselves for now with that.
Okay. I hope that clarifies the question then. Coming back to Adevinta, I think there is some question if you can give an update on tax implications. And if we have received like also feedback on how a spin would be treated in that scenario?
I don't think I have anything more to add actually from what I already said.
And then coming Christian to Nordic Marketplaces. Job listings have slightly widening trend in Q3, if you look at the listing trends in the appendix, how does Q4 look so far? Can you comment on that?
It's very early in the quarter, but I think it looks as if the current trend from Q3 will continue into Q4 as well. We see a continued headwind in the jobs market.
And then looking over at the outlook, I mean, the main message remains unchanged for the business. But looking at delivery, there was like a comment from some headwinds when it comes to consumer behavior. What is driving these headwinds? And what's your plan for the delivery business then going forward?
Do you want me to take it?
Sure
So in delivery, there are 2 headwinds. One is the decline in print circulation also driven by the discontinuation of the Sunday edition. We also have Morgen levering, which is affected by changing consumer behavior. It goes really well in Helthjem Netthandel, but there is a slight change also in the recommerce market changed in the sentiment. So going forward, we will, of course, continue to optimize the cost base and the EBITDA of that business.
And then maybe staying with you, Christian. Can you comment a little bit like where are we on the journey in recommerce to be like EBITDA breakeven by 2025?
Yes. So let's just repeat the target. We have said that we will triple the revenue by 2025 and that we will reach EBITDA breakeven during 2025 not for the full year, that year. I think we're making real progress towards that target. This year, we have focused a lot on monetization, and we are now -- we have grown the gross margins quite a lot through iterations and experimentation through this year. So that is going really well. And we will, of course, continue with that. But to reach those targets, we're also quite dependent on significant volume growth. So we always have to balance this monetization and the underlying volume growth.
And I think you commented a little bit on this, but if you want to provide some color, I mean, there's a question like how have take rates in Norway recommerce Wiks ferdig developed in Q3? And how do you see this going forward?
So as I just said, we have throughout this year, experimented with the different ways of monetizing. So it's been an improvement throughout the year. We will not comment on a quarterly basis on what the taker it is, because this is going to be changing also going forward. But we can go back to Capital Markets Day where we said that we were in the range of 9% to 13% take rate, which then includes the shipping, the payment commission and insurance products. So we're operating in that range, so to speak.
And then I think PC, you commented a little bit on the trend so far in October. Still early days. News Media, of course, advertising is like a big exposure. Advertising was a bit better Nordic Marketplaces in Q3. Is there anything you can share how we should think about advertising trends coming into Q4?
I don't think we give more specific guidance on the quarter as such. We expect there, as I said, to be a continued tough quarter and a tough entry also into '24. The positive thing is that if you're looking at the financials for News Media, we are able to offset that pressure with our sort of cost efforts in Q3, and that will, of course, continue.
And I think there are like several questions on Adevinta. I think Kristin was quite firm that we can't really share much more information today, but I'll take one last question here. And the question is like for Adevinta, do you share the view that the lack of the public solution before the discussions have started, trigger the share to be below like a normalized level over the last 1 or 2 years? If you want to comment on that or not?
I think the best right now is not to make any further comments. So…
Then going back to Nordic Marketplaces, Christian ARPA was quite strong again in real estate in Norway despite like meeting tougher comparables. How should we think about Q4 and then next year when it comes to the strong ARPA growth in real estate in Norway?
I think in general, you should treat the current ARPA growth as exceptional, and that will normalize. The growth this year has been driven by several factors, being driven by price increases. It's also the one -- the index adjustments. Also, the increase, we did last year, which had some discounts into this year. And due to the current environment for selling and buying houses, it's also been an increase in upsell products this year. But -- so going forward, this is probably a normalized to a larger degree.
Then a question on News Media. I think the cost program delivered after plan, which we also saw in the margin. Can you comment on the impact of the cost program in Q4, which we expect and also going into next year?
Yes. So the cost program is accelerating in its effect. It had an effect of NOK80 million in the third quarter, and it will be larger in the fourth quarter, and we do expect the program to have full effect in '24.
And I think we can summarize we said the program should we have NOK 500 million over 2 years. So far, it was NOK 175 million in the first 3 quarters. So like you said, for the full year, 250 million to 300 million...
Yes.
Looking at the medium targets for Nordic Marketplaces, which you present at the CMD, how should we think? Are there any areas which have a bit more risk for next year, for example, in jobs given the current market environment? Is it something which you want to comment on in PC?
Yes. Again, in general, we reiterate the midterm targets. We're working very hard to make sure that we deliver on that. I think in most areas, we are either within or quite close. I think the exception is, Kristin mentioned, is the jobs vertical in the News -- in the Nordic marketplaces, which is more sensitive to shifts in the macro landscape. And I think it's fair to say that when we announced the midterm ambition, we were quite clear also that, that assumes the kind of a stabilization and the normalization of the macro environment during 2024. So we still don't know. We are monitoring the situation very closely. But I think overall, as also Kristin mentioned, we also have the opportunity to work on our cost agenda. And of course, a bit more focused on that if the macro situation continues. So we are preparing ourselves for a relatively tough '24, and we believe we'll be able to mitigate most of these effects in a good way.
And then we can just stay with you PC, there's a question like on capital allocation, capital deployment. If you can like share that like what is your purities when it comes to investments, both organically but also maybe on the M&A side going forward?
So then I can take it and then fill in if I miss something. In general, I think we continue with the capital allocation sort of framework and story that we have had for quite some time, where we kind of the main focus on investments, whether it be in organic investment or M&A, is directly linked to our core business in Nordic marketplaces and in the News Media. And I think if you have followed us for some time, you will see that that's where most of the allocation has gone to. And of those 2 kinds of business models and business areas, we invest in most of the resources into the Nordic marketplaces, and we expect that to continue. But important to say that media is a part of our core business. So we also will look into investments organically and inorganically in that. When it comes to the financial framework, that remains unchanged, having net debt to leverage of 1% to 3% and have a dividend policy of stable to slight growing. And then, of course, we will use share buyback as a vehicle to get into that financial framework if that's the situation. So I think just reiterating what we have been done over the last couple of years is still the focus going forward.
[indiscernible]
Yes, I think that was excellent.
And then maybe one more question on New Media comment on the cost program, Kristin in is media. Can you just remind us a little bit like what are the areas we'll be working when it comes to that program?
Yes. So the main area is the print value chain and its effects like this move I mentioned from -- with the printing plant moving to Wesby. It's the elimination of the Sunday additions. It's also some changes of deadlines, some cancellations of some magazines in Sweden, different things. And then the other major thing we're doing is that we have combined our product and consumer business departments within media. So we get synergies from that and we're able to run it more efficiently by seeing those 2 in concert. So there are many, many smaller things, but those are the 2 main areas.
And then as a question on CapEx, it was somewhat down in Q4 now. And you said you previously that should come down over time. Is there anything specific which you want to add for 2024?
I think it's a bit early to give specific guidance on CapEx level for '24. Happy to see that we are able to reduce the overall CapEx despite there being inflationary pressure portion of our investments goes into the transformation in the Nordic Marketplace. But of course, we will also support our other business areas to some extent. But focus is over time to manage the CapEx level so we can have a good cash conversion.
Okay. I just checking my e-mail inbox, but I think there are no questions here. And also current is not on Slido. So I think then we can conclude the Q&A session for today.
Thank you.
Thank you.