Schibsted ASA

OSE:SCHA

Earnings Call Transcript

[Rolv Erik Ryssdal, CEO & President]

Good morning, everyone. Welcome to this presentation of the first quarter from Schibsted. Welcome to this new location. Well, actually, we've been here before some years back, but we moved our head office [ up till ] this building. And I -- so I hope you're all comfortably seated.Presentation today will be given by Sondre, Trond and myself. There are also representatives from senior management to help answer the questions. The Chairman is present; and also Siv, who's the COO of Schibsted Media.So today, we will spend some extra time on Marketplaces. I'll go through the quarterly numbers, and then Sondre will take you through some more strategic opportunities and market opportunities that we see for the classifieds area. And then we have the normal agenda: publishing, growth, finance and then the summary and then the Q&A.So the headlines from Schibsted this quarter are the following. On the Marketplaces, we continued to deliver on the revenue side, 14% up this time. Margin is up by 6%. Important thing is that we have said it's a main pillar of our strategy to continue to deliver on drive monetization and strengthen our footprint in the verticals. And we'll show you more in detail how we're doing that later, and you can also see that reflected in the numbers. Our major sites France, Spain, Norway, Brazil are continuing to further improve their position. They all had a good quarter. And then we're reducing the investment phase losses, as expected, as predicted by most of you and as we've said we would.On the Publishing side, there is continued digital growth in advertising for Aftonbladet and VG. For the subscription papers, it's mainly on the subscription side, selling digital subscriptions. Then print continues to decline as expected, but the overall economic development is stable. For Schibsted Growth, there is a good development. And it's particularly Lendo that continues to deliver the growth, but we also have some other promising new companies that I'll talk briefly about.So on the Marketplaces -- let's see here, this clicker here. We maintain our growth target of 15% to 20% annual growth. And here we can see the rolling numbers. And there we can see that we are now, on Q1, based on rolling 12 months, last 12 months, reached a turnover of NOK 8 billion. And given that we continued to deliver on our growth target and our growth range, here we can see that we'll be able to double that number by the end of 2022. Just to give you some perspective: We've had this 15% to 20% growth target for a number of years, and we have also historically delivered on it. So important thing is that there is a stronger focus on cash flow and profitability now that we are moving into that phase, and we also continue to strengthen our positions and our focus on the verticals. So let me go through some of the different assets. Let's start by Leboncoin. Leboncoin continues to have positive developments. Here you see on the bullet points traffic growth. That is very healthy sign for Leboncoin. It continued to grow on their new apps and on the mobile. And when it comes to their position in the verticals, there also -- that's also very positive development. You can see that the motor and real estate continued to deliver. Leboncoin has strengthened their position in especially real estate a lot the last few years. That's now the biggest vertical. And we're seeing then that jobs is continuing its rapid rise after we started to charge for the job ads. We acquired the real estates AVendreALouer. And the combination there, the bundle, seems to work very well in the markets and also gives some new opportunities that Sondre will come back to.In Finn, a good quarter by Finn. And when it comes to the verticals there, the car sector is kind of flattish. The new car sales in Norway are slow this year, and this also affects us, whereas the jobs and real estates showed positive developments. I think it's fair to say that in Norway, and we'll talk about the Easter and winter, and this had some effect. So the cold winter and when the Easter is in March actually slows down the classifieds business somewhat in the Nordic countries. So Finn is also somewhat affected by that, and we can see that where there is a pickup on the growth numbers in April.In Spain, very good performance in jobs; very good performance in cars; and also real estates, where we have acquired the site Habitaclia. We see a good continued growth. There has been a lot of product development on the real estate, and I think that has been a good thing. And I'd like to say also that, although jobs and cars are growing, you can say particularly in cars that the total market is still relatively small. So if you compare it to other markets, there should be a very good potential for further growth.In -- and in Sweden, we're not -- this is the exception among the bigger sites. We're not happy with the development in Blocket. And we're working hard to continue product development there. I would like to say that the Blocket has been affected by the Easter and the weather effect, especially on the private side. So when it comes to the car segment, we actually had a slight increase in revenues on the professional cars, whereas private cars have gone down. So -- and I would like to stress also that we're working continuously to do product development towards car dealers and that we are -- we can see, compared to the competitor, we are actually 10x as big in traffic and we are supreme on delivering car leads. Of course, we take all competition seriously. And we speed up the product development in Blocket and -- but we have not seen any effect on the revenues here. And there's also a better trend in April.So then over to the investment phase and the investment phase losses that I know many here in this room are watching closely. We have said for a number of years that, that will go down. That is a result of the sites doing better. And you will see later also that Brazil has gone from red to black numbers. And there's also positive development in other sites. Hence, we're saying that the investment phase losses will be significantly reduced. I used that expression before, remember? Some didn't like it when they interpreted significant and a bit stronger than what we had intended, so this time, we're saying instead, well, let's give it a guidance range and hence the range of EUR 40 million to EUR 50 million.So that's for the investment phase. And then of course, Shpock [ mania ] that we're watching closely. I will say that Shpock has a good development in the U.K. market, continues to grow the traffic and the number of downloads and is a vibrant marketplace in the U.K. And what we're doing there is to develop new features and to start monetization. So we're experimenting with that in the car market especially, where we have sales people on the ground talking to car dealers and rolling out that product.Right, so I think that's actually here I'll end the part which is the update on the pure quarterly numbers. Then let's talk more about the classifieds strategy. What are some opportunities we're seeing? What are the market potential? And here I'll ask Sondre to take over. And Sondre, we have said that the verticals positions are extremely important for us, and I think this illustration shows that we continue to grow in the important verticals.And Sondre, please.

[Sondre Gravir]

Thank you. Thank you, Rolv Erik. I've got the inputs that we are -- many are following the presentation on the webcast, so I'll stand here and try to stand still and not move too much around so we can get it with the webcast.As we have pointed out, we deliver a strong quarter for our marketplace division. In the operations, we are focused on both the financial performance and our market position when it comes to users and customers. Hence, it's good to see that we are also moving on important health metrics like traffic and liquidity, illustrated by the 10% traffic growth in Leboncoin; and a more, even stronger growth in terms of number of leads, which I will comment more on later. And as you can see, our main growth driver is clearly the classified revenues driven by the product developments we provide to our professional customers. And over the last quarters, we have seen that classified revenue makes up an increased share of our total revenues. And cars and real estate, as Rolv Erik was hinting to, are clearly the 2 biggest verticals across our portfolio. And both of them delivers good growth in the first quarter. And further product improvements in our delivery to our professional clients in these 3 verticals will also be the focus in our product development going forward.And as Rolv Erik mentioned, for some of our sites, we have also seen a somewhat softer growth in advertising revenues in Q1, but as you can see here, in total also this revenue stream is growing by 11% in Q1. And we also expect some growth level going forward. And the advertising landscape is changing in Europe with the implementation of GDPR 25th of May, but with our strong traffic positions, our vertical positions and the capturing and usage of user data that we had and also according to the GDPR regulation, we are well positioned to also be a continued strong player in the advertising market going forward.And then this slide, you have seen before. We use it from time to time. And as you know, we have very strong positions in our markets, with huge potential for future value creation. And as I said, we are focusing both on the relative position we have with our users and customers and the relative position we have on revenues. And there are no big changes on these slides in terms of the scoring on our positions since the Capital Market Day we had in Barcelona in November. And as you know, we have very strong positions in France and Norway and in Sweden, as Rolv Erik commented on. We see increased traffic and revenues in our professional car position despite competition. And then as you know, real estate is not an area we are pushing in Blocket at the moment, but then jobs is developing very positive in Sweden. In Spain, it's important to highlight that this scoring is based on the position across all our assets in the Spanish market. And what is also worth mentioning is the strong position we have in Brazil, which I will comment more on later.And we're also focused, of course, on the market size both in terms of revenues per Internet capita and the growth and the GDP size in the markets we are operating in. And we have strong position in markets with strong total GDP and digital market monetization and strong growth. And we have significant headroom, as you can see here, to further improve our monetization. And we will continue to deliver better products to our professional clients in the verticals and continue to optimize price structures in order to capture this value creation.Then we also wanted to give you and share some color on the playbook and the different status of maturity across our marketplace portfolio. What we see is that our playbook of moving our assets up the value-capturing chain is working. We build, first, on our strong generalist positions having high brand awareness, strong traffic positions and then low user acquisition costs fueling our vertical growth. Then when we have become the #1 generalist player, we improve our product offering in the 3 key verticals, cars, real estate and jobs, usually in that order. And we are moving all our positions in these directions. For example, with the product launches and the commercials offering, we are now introducing in Shpock in the U.K. car market after reaching market leadership in C2C cars. Then we've moved into new areas in the vertical value chain, for example, with financing and payment solutions, moving us even closer to the transaction, which in a way you can say is the ultimate goal for our marketplace to be. And we focus relentlessly on reducing user pain points and frictions and to deliver a better products to our professional customers. And then we start to move into more adjacent businesses, creating new revenue streams and further strengthening the positions with our users because we're giving them an even better products, like we have done now recently with the strong push on Finn shopping in Finn in the Norwegian market tapping into the huge e-commerce market.And this funnel, so to say, is also indicating our strategic focus in the marketplace division going forward. We are developing our total marketplace portfolio, but of course, we are focusing on the key value drivers. And we will continue to deepen our vertical roots by improving the product offerings to the customers. And this will result in strong revenue growth also going forward, but as important, it strengthens our position, our competitive positions in the verticals because it builds new barriers for new entries because we're serving our customers in a better way, giving them more quality leads. We also focus on the user sides of our platform to strengthen the demand side, which I will comment a little bit on later in our product development efforts. Then we continue our global products -- global focus on product and tech. And we are continuously converging our platforms both on infrastructure, data and products. And we truly believe that this really strengthen and improve our overall products delivery. And also here we are focusing on our core markets, innovating first with our strongest positions. And then as you know, we have continued to focus and to streamline our portfolio, now with focus on Europe and LatAm. And we will continue our active M&A approach to further strengthen our growth.And we really start to see some interesting and good results of our global product investments. And here are some selected examples: first, trust and reputation. Trust is extremely important on the marketplace. You need to have the trust between the buyer and seller in order for the transaction to happen. And we are deploying this global component now across our portfolio going forward. And what you can see here is, for example, the profile picture of the users; how long the user have been a registered user on our platform; and for example, the average response time this user have if you send that person a message on our global messaging component. And we are also doing some smaller experiments with buyer and seller ratings. Messaging is another important global component in continuous development. This is not a onetime effort. We have to continue to improve our messaging service. And actually now, last week, we had 3.9 million messaging -- messages going through the messaging component every day. That's quite a significant number. And we have launched the component in 14 of our sites. Fincaraiz in Colombia was the last site out. And the average response time from our users across our own portfolio is 14 minutes, so it's really increasing the engagement and the interactions between our users on the platform. Then the third example is the performance dashboard. The performance dashboard was developed in Leboncoin some months ago. And it gives our customers full transparency both in jobs, cars and real estates. It gives them full transparency in terms of the number of leads they get from Leboncoin and the conversion they get from the platform. And then we also proactively suggest up-selling products that they can buy in an integrated way in the performance dashboard in order to increase the efficiency of their ads. And this product, we will also now roll out to new sites. And what we see is this -- that this is increasing the up-selling, products conversion on our sites.Lastly, an area I wanted to mention in when talking about global product and tech effort is that we have dedicated significant product resources now in the first quarter to meet the new GDPR regulation that comes into force on May 25 in Europe. This will also take some products development capacity going forward, but on this area we are truly leveraging the synergies of being a global player, sharing expertise and products across our European portfolio.Then moving into a few selected markets to give some more color than only the Q1 financial numbers. In the Capital Market Day in Barcelona in November, Anders was also there and presenting a deep dive on Finn, so today, I will focus on France, Spain and Brazil.And then first, on France and Leboncoin. And I think it's fair to say that Leboncoin is really firing on all cylinders at the moment. Both revenues, traffic and leads are growing. Traffic is growing by 10%, as we heard, in Q1. The number of leads, total leads, from the platform is growing with 25%, which is indicating even a better efficiency on the platform. This is a strong performance driven by new product development and increased marketing efforts. We have delivered strong revenue in France over the last couple of years, and we will continue to do so going forward. The market is growing. And as you can see, we still have a significant upside in our vertical monetization in all the 3 verticals cars, real estate and jobs, as we see on this graph. And then we are strengthening our market position, driven by new product developments. We are developing strong in real estate with a new bundled product offering, as Rolv Erik was mentioning, between Leboncoin and AVAL, which have been very positive received in the market. We started to sell this bundle into the market by end of last year, and the growth now in Q1 has been strong. And we are also strengthening our position in the professional car market, and we see very encouraging development in the job vertical. And we just announced a new big product launch in the job vertical, and this new product launch will target specifically the white collar part of the job vertical. Hence, we expect also continue -- to continue our strong growth in the job vertical going forward. And then in addition to all these product launches, we are also doing price optimizations to increase our total monetization.And going forward, as I said, it's not only about the product development for professional customers. We are also focusing on the demand side of our platforms and to improve our products for our private users. And you will see a lot of product improvements in Leboncoin going forward. You will see continuous development of our app product. You will see new ad views and new ad listing pages. You will see a new dashboard for our private sellers and the launch of a peer-to-peer payment solution. We will also start experimenting with delivery services. We are improving significantly our holiday rental product at the moment. And we will also start, in the next quarters to come, to experiment with new adjacent business areas also in Leboncoin. In addition, we are also improving our product offering to new builders in France in our real estate vertical with a combination product between Leboncoin and AVAL. So France, even though we now have more than 800,000 new ads coming into the Leboncoin platform every day, as you understand from what you're hearing, the Leboncoin growth story has just started.Then moving over to Spain. We delivered good financial development in Spain in Q1 growing revenues with 18% and delivering an EBITDA margin of 25%. And also in Spain we are focusing strongly on product development. And our revenue in the market is hugely driven by our strong vertical positions. In Spain, brand advertising revenues and private revenues makes up a very low share of our total revenues. This is, of course, indicating a potential going forward, but there are sound revenue -- there is a sound revenue balance in the Spanish market. And our product efforts are now really starting to pay off across all 3 verticals in Spain. InfoJobs is continuing its good growth, being clearly the #1 job marketplace in Spain. In 2017, 1.5 million job contracts were signed through the InfoJobs platform. This is a year-over-year increased from 2016 of 14%. And I have to say, living in Spain with still very high unemployment rates, it really makes me proud to work in a company that gives so much transparency and help people to find a job in a challenging job market.And then in motor, we are continuing to strengthen our #1 position. Traffic is increasing significantly in Coches.net, and with new product development going forward, we expect this growth also to continue. Customer satisfaction for our Spanish car dealers is also improving as we are delivering more and better-quality leads. And this was also confirmed by the markets in the Schibsted Spain motor award event that we hosted in April in Madrid, with great participation from the whole Spanish car industry. We also see good growth in real estate in Spain at the moment. And as you know, we have a good and strong competitor in idealista, but now we are kicking back with product improvements in Fotocasa and Habitaclia. And as you can see now in Q1, Fotocasa is really back on the growth track, strengthening the competitive position with a traffic growth of 30%. We have also launched Habitaclia in Madrid, the stronghold of idealista, and with early encouraging results. And going forward in Spain, we will relentlessly focus on user and customer-driven product development. We think this is the path. This is the way and path to market leadership, and we will continue with a strong marketing push to further strengthen our vertical positions in Spain.Then lastly, moving over to Brazil, another great growth vehicle. I recently visited the team there, and I have to say they have a very strong team in place in Rio and São Paulo. And then linking back to the playbook, the funnel which I commented on earlier, OLX Brazil is truly following that path. We are the clear leader in generalist. We have more than 7 million daily active users and growing strongly. And in Schibsted we love internal competition among our teams, so it was a tough realization for our French team to realize that we have now a new kid on the block in terms of being the biggest sites in our portfolio. But luckily for the French team, they still have the monetization leadership. Let's see for how long, but joke aside, the OLX position is, as I said, very strong, 7 million daily users, 80% mobile traffic share, which are healthy metrics in the mobile-driven market. And now we are the 15th biggest online site in Brazil. Leboncoin is #3 in France, and OLX is climbing.And as you can see, we are the clear leader in the car vertical with nearly double as many car dealers on our platform compared to the #2 player in the market. And we're also a strong challenger in real estate with our combined product offering of OLX and our real estate vertical-specific product Storia. As you know, in real estate in Brazil the recent merger between ZAP and VivaReal created a strong market-leading position, but we are attacking this position with strong product improvements, increasing sales push and marketing investments in the Brazilian market. And we have a very strong traffic machine in our generalists position supporting this growth.Then Brazil is in the early stages of monetization, but as you can see, we deliver a strong top line growth of 50% in Q1. And we see a positive quarter in terms of EBITDA, as we have guided on earlier, so we are very satisfied with the development in Brazil at the moment. And if you look into the total market size, the growth of the market and the speed of our local team in Brazil, we expect this asset to develop very strongly also going forward.So with this, I hope I gave you some more insights in addition to the Q1 financials on the marketplace business in Schibsted. Our team is dedicated to deliver on our strategic development going forward. We are driven by strong growth -- Rolv Erik? So we maintain our 15% to 20% annual growth target.

[Rolv Erik Ryssdal, CEO & President]

Thank you very much, Sondre. And as you can see, we have a very engaged team working day and night to deliver on this. And I'm happy to give some more color on this. Let me also just remind you that, for those who are not present, we'll have a conference call later this afternoon. And then Sondre and I will also travel and visit the investors in London next week and in the U.S. later this month.All right, so now let's turn over to the Publishing. Now we're in the Publishing house. We're in the same building that houses VG and Aftenposten, and I can tell you there's a vibrant atmosphere also here and lots of good activity going on.Looking at the results, at the numbers, you can see that digital growth is continuing top line for Aftonbladet and VG when it comes to advertising. And then the subscription papers are delivering well when it comes to subscription, new sale of digital subscriptions. And you can see that then the turnover this quarter is stable. The margin is somewhat lower than 1 year ago, but that was so much higher than 2 years ago.So if we look particularly at VG and Aftonbladet, they had the strong development last years. Especially, VG had a phenomenal year last year, and they're also doing well this year. And I think the guys in VG are talking about the internal competition, at least inspiration, so I can tell that VG has been inspired by the sale of digital subscriptions that Aftenposten and the others are doing very well. And now VG is saying, "What's in it for us?" And when they started to look close at this, you can see that the VG+ that I'm sure that many of you that -- in this room are following is -- a lot of interesting articles. And that has actually provided also a -- lots of new subscribers even for VG. And the pricing has also been increased. So this is becoming a meaningful revenue source also for VG. I know that Aftonbladet is working out exactly how should they configure their plus offer, what can they do in order to improve their position also here.If we look at the digital subscription numbers, then I think it's the print is, of course, going down, but the print will continue to be there for a number of years. And some people say that, well, print will be dead in a few years. They said that 10 years ago, 5 years ago. I think everyone who's talking about print all the time has to extend the lifetime of print. And if you look at the subscription papers, the growth, of course, is coming from the digital subscription. And here we can see that, younger people, they subscribe to digital content. And I think in the kind of the world we're living in, many people, also the younger generation, are learning and seeing that to pay for quality content is not a big expense compared to what you get. So I think we can -- we see very -- a very positive development there.Then of course, the important part, the engine and all the editorial operations is the work that's being done editorially. And I think that our newspapers, and I am proud to say that, they continue to deliver top-quality journalism. Here are just a few examples from lately: Bergens did, remember also, a very compelling and gripping story about the person that's caught in -- under an avalanche. And you can see that in the recent award ceremony in Norway's SKUP. Then VG was giving (sic) [ given ] several diplomas based on investigative journalism that they have provided. So there's a very healthy development in the editorial departments.Right, then I think, a few words on Schibsted Growth. I said that the Schibsted Growth is -- has a positive development. You can see that yourself. And you can see that, of course, everyone knows about Lendo. I will get back to that in a second. And Prisjakt is a well-known service that is doing well and continue to expand. And then I think there is a couple of promising, also new kids in the -- on the block or in the portfolio. So Hypoteket is one that packages mortgages in the Swedish market. Bynk is a mobile -- purely mobile bank which we have minority shareholding. So there are some promising, new things there. Of course, the strongest growth in terms of revenues and also profits comes from Lendo. I think that is a very good company. And they are proving that this concept is as good in Sweden, Norway and also in Finland. And the growth there continues, so that's why we're looking at should there be other opportunities also for Lendo. Right, so I think I'll end that part here and turn over to the finance part, Trond, so please take that away.

[Trond Berger]

Thank you, Rolv Erik. If we look at the Q1 for Schibsted. We continued to deliver good result and improve our profits. It's good to see that our main assets contribute, first of all, the classified operations in the biggest countries. And also, we do see strong digital improvement in the media business. If we look then at the first quarter, we have an operating profit of NOK 417 million against NOK 228 million, and that is a result of the improved result but also reduced investments in our investment portfolio. And we also see a good contribution from, like, Brazil.If you look at the share of profit from -- and loss from JVs, it is flattish. There is some technical adjustment just from our share in Polaris, but if you look at the underlying, it is certainly a profit in Asia, in LatAm; and then an equivalent loss in Asia.If we look at the underlying development between the 2 quarters, you can see that it is a big contribution from France and delivering on especially all the verticals there. In Norway there is, as explained, also an IFRS effect and some Easter effect, but if you adjust for that, we have an underlying [ 8%, 9% ]growth. And also, in Sweden, I mean, we had a development that is more flattish if you also there adjust for -- at least for the underlying vertical revenues because the display is hampering really the Blocket figures. And also some Easter effect. Spain continued to do well.And then of course, we have reduced our investments in investment portfolio. And it's mainly consists now of Shpock and Mexico. The Publishing has some low results underlying strong digital development, but it's right to say that we also have invested somewhat in new delivery services and also some increased activity like Olympics et cetera in the first quarter. And the growth portfolio continued to deliver. It's, first of all, on Lendo.One important thing to mention in this quarterly report is the IFRS adjustment. And we have a new IFRS 15 that is -- that we need to [ face ] revenue more according to underlying activity. And it is one-off effect, first of all, in the Finn and Blocket and France figures. And the negative effect in Q1 this year is due to that we had some lower income in Q4 in '17, but looking forward, in Q2, Q3, it will be a more neutral effect. And then we will have a slight then positive effect in Q4 again. So this will not really hamper our figures going forward, and we'll see some improvement towards the end of the year. Another IFRS that will be in place is the IFRS 16, which is important for most companies and also for Schibsted. And if we look at the effect of that, it will be close to NOK 500 million improved EBITDA in 2019 and onwards, so it's an important figure to factor in. This will vary, of course, between companies, but we have quite substantial leases that will really improve then our EBITDA figure as such.Looking at the key figures. We have a strong financial position and also deliver on cash flow improvement this quarter. We also have a financing and debt maturity profile that is a sound and good basis for continuing to grow operations going forward.And the board has proposed to the general assembly later today that there will be a dividend, which is stable, of NOK 1.75. And it is 32% of our cash flow from operating activities. And as explained before, we have an underlying tax rate of 30% in our operations; and as we are in many countries with a tax rate around 30%, above or below. And also we have been prudent in taking into account losses in some of the investment activity.So I think that concludes my part, Rolv Erik, and for you to sum up the status.

[Rolv Erik Ryssdal, CEO & President]

Thank you very much, Trond. I think let me repeat the headlines from the first quarter. And I think this actually serves as a good guideline then for looking ahead.The online classifieds continues to grow at the pace expected. We're continuing to emphasize further revenue growth from the verticals. We believe that is where the best growth opportunities are, and we're working hard to push our products in that direction. Then you can see that the -- of the major sites, there is continued good development in France, in Spain, in Norway and Brazil. And there are -- I think you are continuing to see a good development there. Sweden is a bit disappointing with Blocket. We're working hard to rectify that situation. And then we have guided you on the investment losses and how they will develop looking ahead.For the Publishing, I think then it's, when looking ahead, you can continue the same factors playing out. So print will decline but not at a dramatic pace that many anticipated some years ago. And there is a very good development in digital subscriptions for the subscription papers, now also for VG. And we continue to see that VG and Aftonbladet take market share in the ad market. And for Schibsted Growth, well, Lendo is the big locomotive. And I think it will be that also for the rest of this year. There are also other companies such as Prisjakt doing well; and we have some exciting, new growth opportunities that I mentioned.So I think we'll end the presentation here. Then I'll invite up to help me answers in the Q&A Sondre; and Trond, over there. And Siv, if you also could come up and cover the media part, that would be very good. And then I think we'll provide Siv with a microphone, right? I think there's a camera, so I guess we should stand relatively close to each other, right, so we're all in sight.I kind of hit the light. All right, and well, let's open up for the Q&A. Now we get the big panel here, so let's have -- yes, I think it's Preben first.

[Preben Rasch-Olsen]

Preben Rasch-Olsen, Carnegie. Just a few questions. First, Sondre, listening on you on Spain, it seems like the revenue growth was accelerating in Spain going into the next quarters, so should we expect revenue growth well above 20% for the coming quarters?

[Sondre Gravir]

We don't guide specific on revenue growth in concrete countries. The numbers we showed on the slides were rolling 12 months forecasts. And it's fair to say that the growth has been accelerating over the -- if you see on rolling 12-month forecast basis, over the last forecasts. But as I said, we are happy with the development in Spain at the moment, but I will not guide on the concrete direction of the revenue growth going forward. But we will continue to have strong growth figures.

[Preben Rasch-Olsen]

And then on Lendo, there is a strategic review of the personal finance part of growth in Lendo. When will we get some news on this? And in what direction is it heading?

[Rolv Erik Ryssdal, CEO & President]

Well, yes, that's -- thank you for bringing that up. Because we said that last time, that Lendo is developing very well, and we've so far developed then to the 3 countries. And then we believe that there are also opportunities outside of Scandinavia for some of the larger market. And we said, in case we do that, then we'll probably take on a partner to share that expansion. And we're reviewing that now. And I think it's -- I think in the next quarterly presentation we'll be able to tell you more about it. Here. Here's from the webcast. Jo Christian?

[Jo Christian Steigedal, VP & Head of Investor Relations]

Yes. Here are a couple of questions from the audience on the webcast. One is on the situation in -- general situation in the markets. Some of the big names in the U.S., especially Facebook, are gaining some market share in certain markets on Facebook Marketplace. Could you spend some time on talking about this in relation to your sites? How is Facebook not really growing into your main verticals in Skandia and international markets? How do you assess that risk?

[Sondre Gravir]

Yes, we also commented quite a lot on the situation with Facebook marketplaces on our Capital Market Day in Barcelona in November. Facebook Marketplace is present in many of our markets with, so to say, different level of maturity. We are, of course, following the development closely. So far, we don't see a strong competition in our key markets from Facebook Marketplace. We think that we run our classified business in a better way. We think we have better products. We are, of course, focusing then on the trust part and the liquidity part of our marketplace to strengthen our position, but we also focus very much on the content quality in our platforms to make sure that we have good-quality ads, not so much fraud. We have very good fraud mechanisms across our marketplace portfolio. So even though we see the growth of Facebook Marketplace in some of our markets, we still believe that we will be able to continue to develop our positions focusing on user liquidity and content quality.

[Rolv Erik Ryssdal, CEO & President]

And so far, they have enlarged the market. And of course, we're watching that very closely.

[Jo Christian Steigedal, VP & Head of Investor Relations]

Okay, we can -- maybe we can take a couple of -- more from the web. Can you please elaborate a little bit on the competitive situation in Sweden for Blocket? And how much of the pressure you feel there is related to Wayke versus other factors?

[Sondre Gravir]

As I commented on, we have a positive development in our professional car position in Sweden despite competition. What we see in the overall car market is that the first quarter has been slow actually more on the private car part of Blocket, which is now recovering in April, and not on the professional part of the market. And we continues to do product delivery and product development on the professional car side of Blocket. You will see some very interesting product launches now in the second quarter. We see increased traffic growth. And we see improved lead generation to the car dealers, so we are not feeling, so to say, hampered by the competitive situation in the car vertical in Sweden at the moment.

[Trond Berger]

It is fair to say that in the Q1 figures, as I mentioned, there are 4% negative effect of the display ads in Sweden. So that's the importance of it. And in-line, particularly it's doing okay.

[Rolv Erik Ryssdal, CEO & President]

And I think also a very positive thing in Blocket is the growth we are seeing in jobs. I forgot to mention that, but I think the systematic work they have been doing with -- by developing that job vertical last few years is really paying off, and you're seeing there a very healthy growth now.

[Jo Christian Steigedal, VP & Head of Investor Relations]

All right, one more from here. And there was a margin drop in Leboncoin year-over-year. Could you -- would you be able to elaborate a little bit on the background for this and what to expect going forward?

[Trond Berger]

Well, again, we're getting frequently the question, guide on the margin for Leboncoin going forward. And we have said that we're not going to do that. It varies from quarter to quarter due to marketing efforts and other activity. And that's also a little bit the effect of that in Q1. I think that we are satisfied and happy with the margin, but I'm not going to say anything going forward.

[Jo Christian Steigedal, VP & Head of Investor Relations]

Okay. Can you please talk a little bit about the outlook for investment losses in the online classifieds in the -- more in the medium term? What's the outlook there? Can it turn positive? And secondly, can you also talk a little bit about the product and tech development spend? How do you expect that to continue going forward?

[Trond Berger]

Well, when it comes to product and tech, we have said that it is now other, HQ and central products and tech. That is flattish to going down. That's the guidance for 2018, and we reiterate that. Then for the investment phase, we have guided on that to be minus EUR 40 million to EUR 50 million for 2018. And of course, as the main part of this, it includes the Shpock investment. No doubt that we expect this to continue to go down going forward, as it is key for us to of course deliver on penetrating the car vertical that really looks very promising in the U.K. market, first of all, yes.

[Rolv Erik Ryssdal, CEO & President]

I think, with the current outlook, that will continue to go down even further in the medium term. Then of course, we have to respond to things that are happening in the marketplace, like we did -- in our markets, like we did last year.

[Jo Christian Steigedal, VP & Head of Investor Relations]

Okay, we can have one more from here. Can you please talk a little bit about the change to the management incentives that are proposed in your annual report and for the general meeting later today, where the long-term incentive plan is linked to the total shareholder return? What's driving this change?

[Rolv Erik Ryssdal, CEO & President]

Well, the -- that has been suggested by the board because there is a clear expression from the board that they want to link the performance of the management closer to also the performance of the shareholders. So that is it's relatively simple and straightforward. And that's been constructed in a way that I now believe will be -- will link the shareholders' development much closer to the management performance.

[Jo Christian Steigedal, VP & Head of Investor Relations]

All right, one more for me. On Brazil, can you please talk about your medium-term margin expectations? Are there any reasons why you can't replicate the Avito success in Russia?

[Trond Berger]

I mean we would like to do that, of course. And as we've said, we believe that Brazil has a great potential and some of the same [ characteristics ] as we see in Russia. On the other hand, we are still 2, 3 years behind at least in the development or -- and maturity of the site. But we had the healthy and good margin and profitable operations in Q1, so that is good.

[Rolv Erik Ryssdal, CEO & President]

I think it's, 1 year from today, we announced that we increased our stake from 25% to 50%. And we're very happy with the development we've seen there the last year. All right, are there any more questions in this room, I think; and then questions around media? [ And you've got the chance ]. Well, see, there seems to be not that many questions at least in public, but perhaps we can stay around for a few minutes.

[Siv Juvik Tveitnes]

I will.

[Rolv Erik Ryssdal, CEO & President]

And then I think it's time to end this presentation. And thank you so much for attending. And let me remind you that there is then AGM starting at 9:30 here -- at 10:30. And then there is then also a conference call for investors at 2 p.m. this afternoon.Thank you very much.