Vend Marketplaces ASA (VENDA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to this Q2 results presentation, the first one at Schibsted Marketplaces following the sale of our Media business in the quarter. I'm excited to have with me here today our new CEO, Christian Printzell Halvorsen; and our CFO, Per Christian PC Morland, who will guide us through the highlights and developments in the quarter. Following the presentation, we will have a Q&A session, and I encourage analysts to call in with Microsoft Teams, but alternatively can also write questions on the webcast player. And now, without further delay, please let me hand over to you, Christian. The floor is yours.

Thank you so much, Jann-Boje, and good morning, and welcome, everyone. I would like to start out by saying that it's a great honor and pleasure to stand here today for the first quarterly presentation as the new CEO. I'm extremely excited to lead a company which will be focused around core marketplace verticals, Mobility, Real Estate, Jobs and Recommerce, with exceptionally strong brands across the Nordic regions and some of the best positions in the industry. Now, the second quarter of 2024 marked several important milestones in the strategic transformation of Schibsted, which we embarked upon last fall. And the Adevinta deal and the sale of the media business led to significant cash proceeds, which allowed us to pay out the first part of the special cash dividend amounting to NOK 18 billion. We also completed the acquisition of the remaining stake in FINN from Polaris Media, which simplified our structure even further. Now, after selling Schibsted Media, we are in a position to take decisive moves to improve profitability as a more focused company. This includes making organizational changes and implementing cost-saving measures. And in June, I presented our new executive leadership team, which also resulted in a simpler and flatter organization. We also started employee consultations about planned changes to the organization, which will -- or would reduce the workforce by about 250 positions. These initial steps are essential to align our cost base with our strategic and financial ambitions and securing the long-term success of the company. Operationally, we delivered results in line with our expectations. On a constant currency basis, group revenues for Schibsted Marketplaces increased by 3% year-on-year to NOK 2,525 million. Group EBITDA for the second quarter ended at NOK 546 million, that's up 1% year-on-year. And then our Nordic Marketplaces segment, that delivered 7% revenue growth, also that on a constant currency basis. This was driven by Classifieds revenues, which were up 13% as a result of higher revenue per ad as well as transactional revenues, while advertising revenues declined by 14%. EBITDA for this segment grew by 8%, up to NOK 568 million. Our Delivery business saw solid results, thanks to higher parcel volumes, while the Growth & Investment segments were impacted by a reduced demand due to macroeconomic factors. So as I mentioned before, the reorganization of Schibsted Marketplaces will revolve around our 4 marketplace verticals, that is Mobility, Real Estate, Jobs and Recommerce, and these 4 verticals are really the heart of our business. And the transition to a more focused marketplaces company underscores their importance. In fact, when we designed the new organization, we prioritized giving these verticals more strength and more autonomy to better capitalize on the opportunities within each of them. And while our financial reporting has not yet been updated to reflect this reorganization, we do plan to adapt to this in the near future, and especially then in the context of the upcoming Capital Markets Day. So against this backdrop, I will concentrate primarily on these 4 core verticals in today's presentation. And the other business areas will be covered through PC's financial walk-through. So let me then start with presenting the quarterly results in more detail. And driven by solid growth in Classifieds revenue, Nordic Marketplaces delivered a revenue growth of 7% on a constant currency basis in Q2. This was primarily driven by solid ARPA development in all verticals, combined with growth in transactional revenues. This growth was partly offset by volume declines, primarily within the job vertical and also within advertising revenue. Total costs increased by 5% compared to Q2 last year. This was mainly driven by investments in new business models as well as transition to a new common technology platform. That said, costs -- the cost growth was actually lower compared to previous quarters. And that combined with the revenue growth led to an EBITDA increase of 8% year-on-year after now several quarters with decline. So let's then take a closer look at the 4 verticals beginning with the underlying revenue drivers for the traditional Classifieds revenue. If we begin with Mobility, Mobility reported strong uplift in ARPA across all markets, that was primarily driven by the Professional segment. And this, again, was due to harmonization of price models and price structures combined with a growth in upsell products. The strongest uplift was seen in Sweden, where we, in addition to the strong growth for Professionals, also saw strong ARPA development for Privates. In Norway, the ARPA development was somewhat lower, and this was driven by category mix with higher volumes in motorcycles and other subvertical categories with lower ARPA than what we see in cars. On the volume side, in Norway, we are -- we continue to be negatively affected by market headwinds. That is true both for Professionals and for Privates. However, important to say that we saw some improvements here compared to the previous quarter. We then turn to Jobs. Norway experienced solid ARPA growth. This was driven by the new segmented pricing model that we implemented in January of this year, combined with upsell products. And similarly, Finland demonstrated a noteworthy uplift in ARPA. This was driven by a change in the product mix as well as price adjustments. Volumes in Norway declined less in Q2 compared to previous quarters, while Sweden and Finland continued to be affected by market headwinds. Within Real Estate, we continued to see solid ARPA growth in Norway. This is primarily driven by the introduction of new packages within leisure homes for sale. Also driven by upsales in residential for sales segment as well as regular price adjustments that we completed in January. In Finland, ARPA is returning to growth due to changes in the mix of houses for sale versus rentals combined with regular price adjustments. If we then look at the volume side, here, Norway returned to growth in the quarter, while Finland saw somewhat softer growth, and this was due to a decline in rentals while it's important to say that the 4 sales segment is still growing in Finland. Now looking at the financials. The Mobility vertical grew 7% on a constant currency basis in Q2 despite volume headwinds. Classifieds revenues showed a 15% growth on a constant currency basis in the quarter, and this was primarily then driven by ARPA increases. Additionally, transactional models in total contributed with NOK 90 million in revenues, which is an increase of 16% compared to last year. This growth is somewhat softer compared to last quarter as net bill has seen some effects of the macroeconomic climate in Norway. Also worth mentioning that Advertising revenues continue to be affected by volatile markets and declined by 15% on a constant currency basis. Total costs for Mobility increased year-on-year. This was driven by the transition to a common tech platform as well as investments in the transactional C2B models. Despite this cost increase, EBITDA increased by 9% compared to Q2 last year, and this was then driven by the higher revenues, and that resulted in a 54% margin. If we adjust for the transactional models, the margin in, let's say, the more traditional Mobility, Classifieds, was around 60% in Q2. Turning to Jobs, and the challenging macroeconomic environment predominantly affects jobs, as I mentioned before. That said, I'm very happy to see that revenues in Norway has now rebounded, increasing 4% in the quarter after several quarters of a decline. This was driven by a strong ARPA contribution from the new segmented pricing model that we implemented in January together with an increase in upsell products, and also, this improved volume trend in Norway. If we look at the total revenues for the job vertical, then market challenges, combined with a more competitive environment in both Sweden and in Finland, resulted in an overall decline of 2% compared to last year, also this on a constant currency basis. EBITDA was impacted by the lower revenues, combined with slightly higher costs, driven by the transition to a common tech platform. And overall, this resulted in a 47% margin for Jobs. Our Real Estate business continue to demonstrate resilience, reporting a strong 16% revenue growth. This growth was primarily driven by higher ARPA in Norway and the expansion of our transactional rental model in Sweden. In Norway, which is the main part of our Real Estate business, revenues increased by 15% in the quarter. Additionally, I want to say that FINN Real Estate achieved a record-breaking traffic in Q2 with total visits reaching approximately NOK 140 million, which is actually 5 million more than the year before. And this really shows to me the strength that we have with the real estate in Norway. That said, we do anticipate some negative revenue impact in the second half of 2024 due to some agents reallocating marketing funds, influenced by their ownership in the competitor, Hjem.no. In Sweden, we continue to see a solid growth from our transactional rental platform, Qasa. In Finland, I will say that we are very pleased to see great development in key metrics, including both increasing brand awareness and record high traffic levels in Q2. And based on this success of our marketing efforts in Finland, we have now decided to accelerate our marketing activities further to strengthen our leading position, which we think is essential for achieving our long-term financial goals in Finland. Similar to other verticals, costs have increased compared to last year. This is primarily due to the investments in Qasa as well as the acquisition of HomeQ and the transition to a common tech platform. Our EBITDA ended 19% above last year's figures, driven by the revenue growth, and it resulted in a margin of 45%. Again, if we adjust for the transactional models, the margin stands at 52% for Real Estate. And finally, Recommerce, revenues in this vertical increased by 17% on a constant currency basis. This was driven by the transactional business model, and it was primarily the transactional offering, Fiks ferdig in Norway that was driving the growth. And here, the volume of transactions increased by 57% in the second quarter. Also want to mention that since the launch of Tori Diili in Finland in late March, we now operate a transaction model in 3 out of 4 countries. And we are very pleased to see the development of that model in Finland, where the market has responded very positively to that offering. And transactional volumes here reached 155,000 transactions in the second quarter, which, in fact, is surpassing what we saw during the launch of Fiks ferdig in Norway. Advertising revenues were affected by continued market headwinds, and revenues here declined by 10% on a constant currency basis compared to last year. On the cost side, total costs increased slightly compared to last year, driven by the continued investments in these transaction models as well as the transition to a common tech platform also here. Despite this, EBITDA margin improved compared to last year, primarily due to increased gross profit in Norway, Sweden and Denmark. And this overall led to an EBITDA loss of NOK 73 million, which is an improvement of 18% compared to last year. So with that, over to PC for the financial walk-through.

Thank you, Christian, and good morning, everyone. Let me present some more details on our financials for the second quarter. Like Christian mentioned, our financial reporting structure is not yet updated to reflect the new organizational structure. We plan to adapt it in near future, looking then towards the Capital Market Day in Q4. In total, revenues in Schibsted Marketplaces ended 3% above Q2 last year. This development was driven by the mentioned 7% growth in Nordic Marketplaces and a 10% growth in Delivery, offset by a 13% decline in Growth & Investment. The revenue growth in delivery is driven by an exceptional volume growth in the parcel delivery service, Helthjem, up 46% from strong growth in B2C volumes combined with higher C2C volumes due to FINN's tranactional recommerce offering Fiks ferdig. This was somewhat offset by continued declining revenues from Morgenlevering and the declining volumes from printed newspapers. Revenues in the Growth & Investment segment declined by 13%, still impacted by macroeconomic factors with Lendo revenues minus 21% and Prisjakt revenues minus 9%. Revenues from our skilled trades marketplaces increased by 9%. Total EBITDA for Schibsted Marketplaces ended at NOK 456 million, 1% up from the same period last year. This was driven by the mentioned EBITDA improvement in Nordic Marketplaces of 7%. Delivery improved EBITDA from negative numbers to plus NOK 12 million on the back of the increased volumes. Growth & Investment EBITDA declined 21% due to declining revenues in Lendo and Prisjakt. On the back of cost initiatives, total cost in Growth & Investments decreased 12%, keeping EBITDA margin quite stable at 12%. Other & HQ had an EBITDA of minus NOK 86 million in the second quarter. The year-on-year decline was driven by 2 factors: first, increased IT and personnel cost; and second, the sale of our news media operations led to some dis-synergy effects. Let's move to our income statement. Our operating profit for the quarter ended at NOK 218 million, down from NOK 357 million last year. EBITDA is improved slightly by NOK 8 million, while net other income and expenses shows a reduction of NOK 130 million. Increased other expenses is mainly due to increased restructuring costs related to organizational changes and costs related to separation of the news media operation. Net financial items are positively affected by lower interest expense due to down payment of debt and increased interest income due to the increased cash balance. In addition, due to less negative impact of fair value adjustments of equity instruments compared to Q2 2023. Adevinta and media operations are presented as discontinued operations on a single lineup until closing of the transactions. Previous periods are updated to be comparable. Profit from discontinued operations includes a gain on disposal of Adevinta of NOK 2.8 billion and media of NOK 3.8 billion. In totality then, net profit for the group ended at around NOK 6.7 billion in Q2. Following the successful voluntary offer for Adevinta, Schibsted Marketplaces now holds 14% ownership interest in Adevinta through Aurelia Netherlands Topco B.V. While we are represented with one Board member and one observer in the Board and will have good insight into the development of the company, it is presumed that we will not have significant influence. As such, the investment will be classified as an equity investment, measured at fair value with gains and losses, recognized in net financial items in profit or loss. As of the end of June, the fair value of the investment stands at NOK 15.6 billion based on the agreed takeover price of NOK 115 per share in Adevinta. Going forward, we will use a market approach, employing comparable trading multiples to estimate the fair value of the investments on a quarterly basis. The evaluation technique will be based on earnings multiples, primarily enterprise value over EBITDA and enterprise value over EBITDA minus CapEx multiples. These multiples will be derived from a balanced and representative set of public peers operating with similar regions and verticals. The investment valuation will be overseen by myself and the team responsible for the investment in close collaboration with M&A function. Additionally, the valuation will be reviewed quarterly by the audit committee and our external auditor. In addition, an external opinion on the valuation framework will be obtained annually to ensure accuracy and reliability. Let's move to cash flow. Cash flow from operating activities for continuing operations ended in Q2 at NOK 180 million, down from NOK 354 million last year. This is driven by change in working capital, mostly from our Delivery business due to growth and separation effects. And some increased payments for restructuring and separation. CapEx in Q2 ended at NOK 174 million, down 13% from last year. The decline is driven by lower investments within Delivery, Growth & Investment and HQ. Partly offset by somewhat higher investments within Nordic Marketplaces, where most of our investments now go into the ongoing transition into a common technology platform. On the balance sheet, following the closing of the Adevinta and the media transaction, Schibsted is in a net cash position of approximately NOK 6 billion. Total proceeds received from these transactions amounted to around NOK 29 billion. And as approved by the AGM, Schibsted plans to return most of the capital proceeds in the form of a special dividend of around NOK 20 billion and a multiyear buyback program of around NOK 4 billion with up to NOK 5 billion reserved to strengthen the balance sheet. In addition to the ordinary dividend for 2023 of around NOK 450 million that was paid in May, the first tranche of the special dividend totaling NOK 18 billion was paid in June. The remaining NOK 2 billion is planned to be paid during Q3. As earlier communicated, the share buyback program is expected to start during Q3. And following the closing of the transactions, the term loan of NOK 2 billion and a loan from the Nordic Investment Bank of EUR 11.5 million were fully repaid. Our loan portfolio now consists of bonds issued in the Norwegian bond market of total NOK 3 billion plus an undrawn credit -- revolving credit facility. In June, Scope affirmed Schibsted ASA's BBB issuer rating and revised the outlook to positive, confirming Schibsted as a solid investment-grade company. So before we go into Q&A, let me give you some perspectives on the current trends that we are observing. Overall, we expect a somewhat muted Q3 compared to Q2, which is driven by Mobility and Real Estate. In Mobility, the main drivers are stronger comparables during the second half of '24 for our professional customers, mainly in Sweden; volumes in Norway still being volatile and uncertain; and advertising still being challenging. Within Real Estate, as Christian mentioned, we anticipate some negative impact in the second half of 2024 due to some agents downgrading their packages. Also, we have decided, as Christian said, to accelerate our investments in marketing activities in Finland to further strengthen our leading position. In Jobs and Recommerce, we expect some improvements driven by job volumes in Norway and a continued buildup of our transactional C2C offering in Norway, Sweden and Finland. And with that, let's go to Q&A.

Thank you, PC. So switching over to Teams. I think quite a lot of people have connected already. And I think first in line is Giles from Jefferies. So Giles, please unmute yourself and go ahead.

I'm just checking you can hear me. Brilliant. Thanks, JB. So first question was, yes, back on Hjem in real estate in Norway. And just if you could expand a bit more on exactly what agents are saying to you and how they're changing their behavior. And any comment that you're happy to share about any regrets you have about the overhaul of the packages you did in real estate in Norway back in January 2022? Second question is on the thinking behind the shuttering of HONK in all markets. And then the third was, again, the thinking of putting the Growth & Investments function underneath PC and not replacing Andrew Kvalseth. Forgive me, I'm probably pronouncing his surname wrong. But Andrew Kvalseth, why didn't you replace him like-for-like when he resigned from Schibsted?

All right. I'll take the 2 first questions, and you can take the last one, PC. With regards to Real Estate, what we disclosed now is that we see that some agents, particularly those who have an ownership stake in the new competitor, Hjem.no are likely to downgrade their packages to reallocate marketing funds to Hjem.no. We are confident in the strength of our position. We believe that we, by far, deliver the best marketing channel and the most value for money when you market your home on FINN. So we see those downgrades as hopefully a rather short term in nature, and we believe in the strength of that position, and that can come back over time. Then the second question was related to HONK, which was our startup, if you will, within car subscriptions, which we had started in Norway and then also launched in Sweden. We decided to shut down that initiative, as we saw that the trends were not going in the right direction and that several other players in the same market segment were struggling with profitability. So this was really because we couldn't see that to deliver good results in at least the short to medium term.

Yes. And then on your third question related to placement of Growth & Investment, I think it makes very much sense now to organize our business and our organization around the 4 core verticals that Christian has presented earlier. And that also means that the assets under Growth & Investments are not viewed as our core business, and we are now looking into how can we extract the most value from these assets. But -- so I think read into that, that we will now really operationally focus around the 4 verticals in the Nordics.

Okay. I think next in line is Eirik from Carnegie.

I've got a couple. I'll do them one by one, if that's okay. I actually want to follow up with one of Giles' questions on Hjem and real estate in Norway. To what extent do you think that the end consumers actually understand what they pay for when they buy these marketing packages from their brokers? Do you feel like you have a job to do in terms of educating end customers kind of on what's in those marketing packages? And also, looking relative to your ARPA versus what the brokers charge, I mean, at least from my end, there seems to be some sort of discrepancy there.

Yes, it's a great question. And we know for a fact that home sellers, they trust very much what they hear from their agent because it -- I mean, when you sell your home, it's the most valuable asset you have. You really put your trust in what the agent is telling you. So we have actually started to take some measures to educate the consumer more about the different offerings that we have on FINN to make sure that they can also be educated when they go into that dialogue with the agent about what is the best marketing strategy for their home. So that is important to us, definitely.

Okay. Perfect. And a couple of other questions as well. Is it possible to get a short update on the 250 FTEs that you're planning to trim? Like how far have you come in, in that process?

The sound was a bit bad here, but I think you asked the update on the reduction of 250 roles and how far we have come in that process. And we have announced that, as you know, before summer. We have started consultations with employees and unions on that. And right now, not so much is happening through the summer, of course. But then the implementation of this will happen from the beginning of September and will go into Q4 before it is completed.

Perfect. And just one final one for me before I jump back in the queue. Again, just a formality, just on the potential date for the final extraordinary dividend and then start of buybacks. I might have missed it during the presentation, but any clarity there as well would be good.

If the question was on the date for the share buyback, so we have said that it will start during the third quarter, so you should expect towards the end of the third quarter.

I think the audio was a bit bad. So let's see how it goes for Jo from UBS. Jo, please go ahead.

Excellent. Yes. A couple from me. So firstly, just on cost savings. Whilst I understand you can't give us anything concrete, you obviously announced the [indiscernible]. Is there anything you can say with regards to the potential for further headcount reductions after that and also whether you expect further cost savings outside of headcount reduction? And then secondly, in the release, you highlighted higher personnel and tech costs as a driver for the other or HQ costs, but also because of the synergies from the media perimeter divestment. How much of this increase is attributable to the synergies? And should we expect a similar scale impact in 3Q and 4Q? Hopefully, you heard that albeit based of the video. I'm not sure whether you did.

I couldn't hear it. Could you hear it?

Yes. I'll try. So I think the question was, first, a bit more color on, let's say, the cost and the opportunities ahead, whether we see more opportunities also outside the more central functions. And if I understood the second question correct, it was a bit more color on the HQ cost development in the second quarter. So on the first one, I mean, as Christian has been quite clear on, this is one important first step. We will continue to work on our cost agenda in the years to come. This will be a very integrated part of our total agenda that we will bring to the CMD in Q4. We will not give any more specific color on that today. So you have to be a bit patient on that. But of course, we see opportunities to further strengthen our efficiency and cost in the entire organization and the entire company. So it's not just focused around a few sort of central functions and agenda. Of course, if you look at the 250 roles that Christian has talked about, a lot of that is centered around cost as today it resides in HQ & Other. So of course, that's an important area to address. Then over time, you will see that some of these costs will be impacted by the measures that we are already taking right now. But as you said, I mean, unfortunately, we don't see any positive effects of that in the second quarter, while we see some dis-synergy effects in the quarter. So if you're going to give a number, up to half of the effect is actually the synergies in the second quarter. And you should also expect in the second half of '24 that there will be some noise on these numbers because there's a lot of things happening in HQ & Other while we are doing this transition. So over time, we will be able to address the cost base. Short term, there will be -- we expect a somewhat weaker EBITDA development in HQ & Other in the second half. But that will be addressed through our measures, both sort of in the second half, but also beyond that.

Maybe worth adding to that is that some of the cost base is kind of locked in as we need to deliver services -- transitional services to the Media business. And as we exit those TSA agreements, we, of course, can and will address that cost base as well. But that will be a little bit further down the line.

Perfect. Okay. It seems like audio is a bit better. So let's try again with -- I think next up is Will from BNP.

It's Will Packer from BNP Paribas. Sort of 2 topics I wanted to cover briefly. So firstly, could you help us think a little bit about the longer term portfolio shape? There's been a lot of change. Are you a Classified business or a Marketplace business only? Or are you a wider consumer internet play? And -- there are obviously implications for your footprint today. And on the other side, do you see scope for acquisitions to further consolidate and expand? And are you Nordics only? So that's kind of the first bucket. And then, in terms of the second topic, could we talk a little bit about the headcount reduction plans? You've asked us to sort of wait and be patient for the CMD in Q4, but on the other hand, there's been very positive share price reaction on the potential for cost savings. So could you just help us a bit of context? So you talked to 250 employees. And in the 2023 Annual Report, it suggested you had 1,300 employees in that division. On the other hand, you have over 1,000 headcounts employed centrally. What's the real scope of the cost savings here? How should we think of the total addressable footprint of employees for that cost saving program?

All right. I'll take the first question and you can take the second, PC. When it comes to what kind of company will we be, we will clearly be a focused marketplaces company. And we will be centered around the 4 core verticals that we also are focused on in today's presentation: Mobility, Real Estate, Jobs and Recommerce. And you can expect the portfolio to support those 4 verticals. And that, of course, then will lead to quite some work now to evaluate the different assets that we have in the portfolio and see which companies will we keep and which will we divest. Will there be room for consolidation and acquisitions? We will certainly have the financial capacity to do acquisitions. There are potential opportunities within the Nordics. And I think it's fair to say that we will be focused on the Nordics for sure. And over time, it's, of course, you shouldn't rule out the expansion outside of the Nordics, but that is not a priority for the time being. What we are looking at is that with some of the transactional models that we have, Qasa, for example, whether we can do test that out in some other markets, but that is on a relatively low scale for the time being, I have to say.

Yes. On our cost and our FTE agenda, so the 250 roles, if you look at what was the scope that we looked at when we identified those roles, so that are all employees that are currently working in Nordic Marketplaces. They are all employees that after the separation of media works in head office and central functions. So that has been the main scope. And in central function, keep in mind also that there we have a lot of our technology resources residing. So in totality, that was a bit more than 1,600, so 250 roles is related to a bit more than 1,600 FTEs. Then, in addition, we also have quite a lot of employees working on Delivery business, working in Prisjakt and Lendo. And as you also have seen in the results today, we are also addressing that in parallel in order to manage the cost and efficiency agenda there, but it's a slightly different process than the 250. So I think that's some color on the question at least.

So next up in the line here is PV from Morgan Stanley. Pete, please go ahead.

3 topics, I guess, for me. So maybe first on Norway Mobility ARPA. You went from 11% growth in Q1 to 7% now. I think you mentioned something about like the mix in listings changing, but can you open up a little bit more because my assumption is that when you kind of remove these legacy discounts, that's going to have a year-over-year impact for the whole year. So what is driving the deceleration in ARPA growth in Norway Mobility? That's the first one. Then the second is on Hjem and a little bit more on these agents moving. Are you saying that they're not moving all of their marketing, they're just downgrading their existing packages? And if you can give any kind of indication like these agents what portion of your listings do they represent, some kind of ballpark would be helpful. And then the last one is, should we expect DBA transactional monetization in 2024? Or is that sometime later?

Right. First on mobility, what -- I mean, you're right. I mean, the changes, the removal of the discount, they have kind of full year effects this year. That was for the Professional volume. What is impacting the ARPA in this quarter is the mix between cars and other categories such as motorcycles and other, let's say, non-car categories, which have lower ARPA. So it's been a huge growth in motorcycles, for example, so that in total changes the overall upper level. Then, on Hjem.no, first of all, we have not seen any movement of FINN. We have the complete volume of homes on FINN Real Estate. We continue to have a very strong position. But of course -- and we can also say that out of 18,500 current properties on FINN about 1/3 of that is today present on Hjem, the competitor. So that they have a substantially lower offering of properties on their site. Then, it is true that some of the agents that have an ownership stake in Hjem, they have decided to downgrade their package from large to medium, for example, but they are -- but as you said, they are not taking their properties off FINN. It's just a downgrade to reallocate some of the marketing funds to a channel they own, so to speak. And we think that -- we believe in the strength of FINN, and I think that this is hopefully rather short-term. Then the last...

DBA '24.

DBA '24...

Yes. So we haven't communicated, and we will not give sort of concrete guidance on the sequence and the timing of the sort of the next steps on how to sort of roll out the common technology platform.

Is the plan still to roll DBA also into the common platform?

I think if you look at the totality of our plan, we want to consolidate technology, right, to get scale on technology. So that would also mean DBA definitely over time. Yes.

I think then there's a handset up from you, Will. I don't know if that's a new hand or an old one, but before we clarify this, so let's take Andrew from Barclays.

Guys, can you hear me okay?

Yes.

Cool. I've got a couple left. So first one is one for PC, which is now that we have deconsolidated news media, can you give us some updated color in terms of how to think about the cash flow bridge between EBITDA and free cash flow and kind of beyond the EBITDA what opportunity you have to drive savings in a simpler organization? But if you could give us some directional help around how to think about CapEx and leases, in particular, that would be helpful. The second one is back on Norwegian Real Estate. And I guess to ask you what you can kind of do about this and agree to which maybe you can try and unbundle FINN from the marketing package because it seems to me that there's going to be sellers who lose out from some of these changes given presumably the ROI on Hjem is much lower. There might be the case on FINN there as all of the audience and whether you could actually kind of make that into a positive over time, would be interested on that. And then the third one is on the Delivery business, which grew really well in Q2. I think there's a bit of a [ TIMO ] effect going on there. Can you just tell us what's driving that? How to think about that into the rest of the year?

Shall I take the first and the third?

Yes.

So starting on the last question. Yes, you are correct, TIMO is a main driver behind it. There's also growth in excluding TIMO, but TIMO is adding significant volumes into our business there. So this is basically just TIMO entering Norway and use -- we are 1 of 2 prioritized partners. We expect this to continue also for the rest of the year. But, of course, how long and how big that will be is out of our hands. The good thing is that we can see that we can handle quite a big increase in volumes in our distribution network in a good way. Back to your first question on the cash flow, EBITDA will, of course, be the core that we need to improve, both by top line and efficiency going forward. As you said, CapEx is still quite big for us. Most of our investments now go into the new common technology platforms, and this will continue for the next couple of years. And then, of course, after that, there's an opportunity to significantly reduce the cash burn related to that. So I think at least how we're looking at it is really taking EBITDA minus CapEx. That's how we kind of define cash generation from an operational point of view. You're right. Yes, there are leases. But as you can see also from the results now, leases are more or less back to offices and stuff. So it's not such a big part of our business going forward. Other components like taxes will continue, but follow the results in the business and also now giving our strength in our balance sheet, we will be actually in a positive situation where we will have more interest in expenses on that. So I think that will be the kind of maid drivers. But I -- we at least, and I also urge you to focus really then on EBITDA minus CapEx as a sort of operational cash, and we will come back to the CMD and give more color on this.

Yes. And the second question was around real estate and the competition in Norway and whether we can unbundle the FINN product from the marketing packages that the agents sell. I think that would, of course, be ideal to be able to do that and sell directly to the end consumer, that then we would have a nonprofessional buyer on the other side. But it's quite challenging thing to change the overall structure in the market. But I would say that it is a strategic importance for us to strengthen our relationship with the home sellers in Norway to potentially get into that situation over time. And it's also fair to say that there are several nuances to this, where you can -- it's not a black or white, you can also go partway where you, for example, try to break out the FINN product from the agent's package, but it's still sold through the agent as an example. So we are considering and evaluating several different options in order to kind of strengthen our position in this area, but it's not something that is very easy to do, I have to say.

Great. Thanks, Andrew. I think then we go to the written questions a little bit. I think most of the questions have been replied. But I think one follow in Real Estate, I mean, in terms of FINN Real Estate, it's obvious that your offering is outstanding and relative to the competition, independently of the price of NOK 3,000 or NOK 6,000. Is it now really the time to demonstrate your strengths and increase price significantly to show the position you have?

Well, I think we have said before, we completely agree with the statement made here. We have a fantastic strong position in Norway. We -- that would warrant a larger share of wallet when it comes to marketing your home. We are working actively with the pricing agenda for Real Estate, and you can expect things to be done going into 2025 as well. So definitely a high priority for us to continue to increase ARPA and monetization in this vertical in Norway.

And then one question on advertising, which was down like 14% in the quarter, if you see this in line with the market? Or do you think you're losing some share also when it comes to the split now with the media organization?

Well, I think it's fair to say that there are several things impacting advertising. First of all, advertising is a cyclical market, and we are affected by that. And we see that both through the direct sales and programmatic sales. I would say, in particular, we have seen that the financial sector is buying less advertising. Also, we have seen some car dealers buy less advertising as a result of the increased prices that we did on Classifieds. And then, with the break from media, we are -- also now in Q2, we have spent quite some time on building up a new advertising organization as we have to also build up some new advertising technology and so on. And that will also impact the advertising results, let's say, in the -- already and in the near future.

Thank you, Christian. And then one question before we go back to the queue. Looking at the cost development, you comment a lot on the common tech platform in Q2. When do you think the project will be completed? And how to think about the cost base after the completion of that project?

Yes. We did comment on that, and that, that had impact on the cost levels for all verticals. That is a multiyear project, but it's a project that we believe over time will create a significantly better cost structure overall for Schibsted Marketplaces. And it's one that we -- it's not like all the impact will come at the end, but we will see impact along the way. But we have not given any definitive timeline for that yet other than saying that it will be several years.

Maybe a comment. We also said before that we will come back on the CMD to give some more perspective and clarity around this topic because it is a very important part of our agenda going forward.

Thanks. And then going back again to the queue in Teams. I think PV, your hand is up again. Or is it like an old one?

No, it's a new one. So one follow-up on Andrew's question about the potential separation of FINN listing from the marketing package for agents in Norway. Agents were kind of upset in 2022 when you made the package restructuring. Have you discussed with agents at all, like how would they react now if you were to separate the listing from the marketing package? Is this something that they would welcome, something that they would be against? What do you think?

We have not discussed this with our customers. I think it's fair to say that, that element of their marketing packages is, of course, an essential part of those packages. So I don't think it would be something that they would welcome, is fair to say.

And then, Andrew, your hand is up as well? Is it like an old one? Or do you have another follow-up question?

It's an odd one, sorry.

No worries. Yes. But I think then we are through with the questions today. So thank you for connecting for the Q&A.

Thank you.

Thank you.

And have a great summer, everyone.