Vend Marketplaces ASA (VENDA) Earnings Call Transcript & Summary

Good morning, and welcome to our Q2 results presentation this morning here from Oslo. My name is Jann-Boje, and I'm heading Investor Relations at Vend. As usual, we have our CEO, Christian; and our CFO, PC, with us to walk you through the development and key performance in the quarter. Following the presentation, we will have an analyst Q&A session with Microsoft Teams. And before I hand over to Christian, let me just quickly walk you through the disclaimer slide. So our presentation includes forward-looking statements, and please refer for the full text on this slide for more information. And with this, Christian, the floor is yours.

Thank you so much, Jann-Boje, and good morning, everyone. So at the start of the year, I described Vend as now being a focused pure-play marketplace company moving into full-scale execution. And our second quarter results demonstrate this execution through expanded profitability, accelerated cost management and continued strategic progress. Group revenues ended at NOK 1,696 million. That's flat year-on-year or 2% up on a constant currency basis. Our 4 verticals increased by 10% in constant currency, and this was partly offset by the phaseout of transition service agreement revenues from the Schibsted split. Group EBITDA increased by 16% to NOK 674 million, with the margin expanding around 5 percentage points to now 40%. And this was driven by cost discipline and strong revenue development in real estate and Recommerce. Jobs continued to grow as monetization more than offset softer volumes. And in Mobility, both Norway and our transactional businesses performed well, but Sweden remains affected by the ongoing platform stabilization and Denmark by dealer adaptation to our new business model. On the strategic side, I will cover the platform transition and AI more in depth on the next few slides. But on costs, we're actively capturing the savings that our simplification and platform transition make possible, and we have now taken further steps ahead of plan. And we now expect OpEx, excluding COGS, to decline around NOK 150 million year-on-year, and this is up from the NOK 100 million that we indicated at Q1. And PC will cover this more in detail. We also remain disciplined on capital allocation and the first NOK 2 billion tranche of the buyback program is well underway, and we have repurchased around NOK 1.6 billion as of July 10. So in summary, while parts of mobility remain challenging in the near term, the underlying health of our business remains strong with growing revenues in the verticals, expanding margins and accelerated strategic delivery. So moving on to the platform transition. In Norway, the Finn migration was completed on time. This was a back-end focused and more technical transition with no changes to the user interface or the product experience, and this was delivered without any disruptions. And the legacy platform shutdown is also progressing well. Now with Finn complete, the consumer-facing marketplace migration is essentially done with Tori, DBA, Blocket and Finn. So if we then turn to Blocket specifically, we see key metrics continue to improve. User satisfaction, for example, has more than doubled from the post-transition low and is now approaching the pre-transition levels. And total Blocket visits also continue to improve. And the private car listings recovered to minus 9% year-on-year. This is up from the minus 35% that we had just after the transition. And leads per visit in mobility are now up 26% year-on-year. And going forward, our focus remains on the private ads, on the app experience where we have the greatest engagement, but also increasingly on the sub verticals. So what remains then of the transition that's fairly limited in scope, Bilbasen in Denmark, which is planned for 2027 and professional tools across our brands, most notably Dealer Hub. And completing this allows us to shift more of our resources from migration to new value-creating products and features. On AI, we continue to experiment broadly. We're also increasingly scaling the things that we see work. And the result is better products for our users and customers and greater internal productivity. And I'll just give you a few examples from the product side. In Recommerce, for example, natural language search is now available across all markets, improving the share of users who see relevant results. In real estate, we have now advanced the virtual staging or the redecoration feature. We have improved the AI-assisted valuation, and we're continuing to experiment with conversational search. And in jobs, we're deploying AI matching application tools for both candidates and recruiters. And I'll show you a concrete mobility example on the next couple of slides. But I also want to comment on the productivity side. And these are some numbers from our internal survey from June that shows that 86% of our employees now use AI on a daily basis. 42% say that they save more than 4 hours per week from this. And we have doubled the number of employees who are building reusable AI solutions since our last survey in February. And all of this is managed, as we have said before, within our existing financial framework. But before we move to the verticals, I'd like to give you a concrete example of how AI is creating value in Dealer Hub. We sit on massive amounts of data, pricing trends, buyer behavior, competitive positioning. And we are now using AI to turn all of that into actionable insight on every single car on our sites, helping dealers to spot underperforming cars and sell faster. This is live in Norway with good feedback and it's planned for Sweden in the second half. But let me give you a short demo of this. So this is Dealer Hub. And when a dealer logs in, they can see all their active listings sorted by priority. Here on the right, there's an AI summary for every car, also the recommended actions for that car. And let's click on this Volkswagen Polo at the top. You will see a side panel open with the daily AI review. This tells the dealer what's working and what isn't. Below that, you can see the recommended actions for this one, it's renew the ad and ad missing equipment. And then before taking action, the dealer can check the data themselves, the historic performance of this car, a number of different metrics that shows how this car stacks up against the market in general to get a better understanding. And once the car dealer has looked through all of this and is convinced -- he or she can go back up. And with one click, renew ad, confirm, done and then over to the next action, ad missing equipment and done and over to the next car. This is AI reviews in Dealer Hub. So with that, let's go through the regular walk-through of the verticals. And as usual, we will start with mobility. In Norway, ARPA growth continued to be strong, up 19% for professionals, 13% for private. This was partly driven by the annual price increase, but also further boosted by packaging and improved upselling. Car volumes in both professional and private segments increased, although this was offset by a decline in the subverticals. In Sweden, the platform situation for car dealers is now stable. And as planned, we implemented a price increase on May 1. As a result, professional ARPA increased 3% in the quarter. This is then the net effect of the price increase, but it was partly offset by lower voluntary spend from dealers such as reduced upselling and add-ons such as the bump as an example. Private ARPA decreased due to various mix effects. And if we look at volumes, professional volumes increased 1% year-on-year but Pro car volumes grew by 5% in Q2, and that was boosted by a particularly strong June. But as Ed said, offset by a decline in the sub-verticals. For private, the picture improved in Q2. Car listings declined only 9% compared to the 26% drop that we reported in Q1. And in Denmark, the professional ARPA at DKK 771 increased compared to the DKK 644 that we reported in Q1, and this was supported by improved package splits and renewals. Private ARPA declined. This is due to the reversal of -- to the free-to-list model of cars priced below DKK 50,000 that was done on BBA in September last year. And on volumes, the Danish market has improved compared to Q1 and the decline -- the continued decline that you see now in professional volumes is primarily driven by dealer adaptation to our new business model rather than market conditions as such. And private volumes turned positive. This was also driven by the mentioned reversal to the free-to-list model and the price volume is up 27% year-on-year. On to the financials for Mobility. Revenues increased 6% in constant currency. Classifieds revenues also grew 6% in constant currency. Strong growth in Norway at 17%, partly offset by Sweden at minus 2% and Denmark at plus 7%. Transactional revenues increased 13%, driven by Nettbil and Autovex. And advertising revenues declined 13%, and this was mainly driven by Sweden. OpEx, excluding COGS, increased 10%, primarily driven by personnel costs and marketing investments in Sweden, where we have elevated our marketing activity to support the Blocket recovery, and it also reflects the continued investments in our C2B businesses. So overall then, EBITDA decreased 4% year-on-year to NOK 365 million, resulting in a margin of 53%. Then moving to real estate. And in Norway, ARPA grew 16% year-on-year with residential for sale, the primary driver at 17% growth. And on volumes, residential for sale was flat year-on-year. This is a very resilient outcome, I think, reflecting sustained high activity in the Norwegian housing market. And total new approved ads were down 3%, but that was driven by the rental and leisure home segments. And then moving to Finland. And here, following the shift to the fixed monthly pricing that we introduced at the beginning of the year, we are now tracking the number of offices as our primary volume metric and ARPU or average revenue per office as our pricing metric. And in Q2, ARPO was up 5% quarter-on-quarter driven by package upgrades and increased value-added services. We had 1,562 offices active on Oikotie, and that was stable quarter-on-quarter. So this means that real estate delivered another strong quarter. Classifieds revenues grew 13% year-on-year with solid growth across all segments. Norway contributed 15% growth with residential for sale then as the key driver. And Finland grew total revenues 18% year-on-year, and this was driven to the -- by the move to the subscription-based model in Q1. And also our transactional businesses, the rental businesses continue to perform well with revenues up 18%, led by Casa and HomeQ in Sweden. On costs, OpEx, excluding COGS, increased 7%, reflecting continued investments to grow the business. And EBITDA then reached NOK 248 million, which is up 24% year-on-year with the margin expanding to 58%. Moving to jobs. Here, we continue to deliver strong ARPA growth with ARPA up 15% year-on-year in Q2. This was driven by 2 factors. First, upsell products performed really well, and we also continued to refine our discount model. On volumes, new approved ads were down 9% year-on-year. This was partly due to timing of Easter, which fell differently from last year. But if we look at the year-to-date, the volume decline is 6%, which mirrors the publicly available figures from Statistics Norway, SSB. And then on the job financials, revenues increased 5% year-on-year as the ARPA growth of 15% more than offset the 9% volume decline. And OpEx, excluding COGS, increased 9%. This was driven by planned investments in the team to support continued revenue growth as well as some temporarily higher consultant costs. And this led to EBITDA growth of 2% year-on-year to SEK 175 million and a margin of 58%. And then finally, we have Recommerce. Here, the transacted gross merchandise value showed a positive picture in Q2. Norway continued to grow with GMV up 17%. And importantly, following the platform transition, Blocket in Sweden returned to GMV growth, which is a positive signal, 2% up. And Finland delivered a strong development with GMV up 32% and Denmark up 68%, although from a smaller base. And take rates also remained solid across all markets, Norway at 16%, Sweden at 10%; Finland, 17% and Denmark at 15%. And Recommerce then grew revenues 21% year-on-year on a constant currency basis. Transactional revenues grew 20%. This was driven by the strong volume growth across all markets. Classifieds revenues increased 13% and advertising revenues increased 17% year-on-year, also with growth across all markets. Gross margins continued to improve. This was supported by a number of successful COGS and pricing initiatives in Recommerce. OpEx, excluding COGS, increased 5%, and this was driven by marketing investment, a deliberate choice to support the volume growth. And I think it's really good to see the continued EBITDA development and improvement. EBITDA increased by NOK 23 million year-on-year to minus NOK 33 million, and margin improved 14 percentage points to 14% in this quarter. And keep in mind that this improvement came despite intensified marketing in the quarter and Recommerce continues to advance towards its medium-term targets. So with that, I'll hand it over to PC to go through the financials in more detail.

Thank you, Christian, and good morning, everyone. Let's dive into the financials for the second quarter. In total, revenues on a constant currency basis increased 2% compared to Q2 last year. Vertical revenues, as mentioned, grew 10%, driven by solid double-digit revenue growth in both Real Estate Recommerce, while we see a mid-single-digit revenue growth in mobility and in jobs. Revenues in Other HQ declined 72%, as expected, driven by the exit of TSAs with Schibsted Media. Total EBITDA ended at NOK 674 million, 16% up from last year. EBITDA growth is driven by real estate, Recommerce and other HQ. The vertical performance is well covered by Christian, but let me give you some additional comments on the other HQ segment. Despite a significant revenue drop, other HQ EBITDA improved from minus NOK 114 million in Q2 last year to minus NOK 81 million in Q2 this year. This is driven by accelerated cost takeout, more than offsetting the revenue decline from the lost TSA services, in addition to some negative one-offs that we carried in the first half of 2025. Now let's look closer at the cost development in the quarter. As before, this slide shows OpEx, excluding COGS. In total, OpEx, excluding COGS, in the quarter declined by 10% compared to last year. Other costs decreased 33%, driven by positive effects from our simplification and cost efficiency agenda. Cloud costs and other IT-related costs are significantly reduced after the exit of the different DSAs. Marketing costs increased 23% year-on-year, support driven by supporting our growth agenda in the verticals in the quarter. Personnel costs increased by 2% from increased personnel costs in mobility, real estate and in jobs, largely offset by a decline in Recommerce and other HQ. Total FTEs ended at 1,648 at the end of Q2 compared to 1,660 at the end of Q1. The reduction during the quarter is driven by a reorganization, reducing around 30 FTEs in our common product and tech units. And then also, as mentioned by Christian, during June, we executed another reorganization with reducing around 70 FTEs within the mobility vertical and the support function. This is not included in the Q2 FTE numbers and takes effect from July 1. The accelerated reorganization initiatives with reduction of around 100 FTEs during the quarter is enabled by our solid progress on the company simplification and the platform transition agenda. These were earlier planned to be executed at the end of '26 into '27. Overall, despite the limited revenue growth, the cost reduction resulted in almost 5 percentage point improvement in OpEx over revenue with the ratio improving from 57% in Q2 last year to 52% in Q2 '26. Our operating profit for the quarter increased to NOK 448 million compared to NOK 330 million in Q2 last year. The positive development in operating profit mainly reflects the improved EBITDA and somewhat lower net other expenses compared to last year. The reported other expenses in Q2 this year includes NOK 95 million of costs related to the accelerated reorganization from the previous slide. The fair value of our 14% ownership stake in Adevinta remained more or less unchanged at NOK 7.2 billion in Q2. A small gain of NOK 53 million was recognized as financial income in the quarter. In totality, net profit for the group ended at NOK 401 million. Now let's move to cash flow from continuing operations. Cash flow from operating activities ended at NOK 517 million, an increase of more than NOK 200 million compared to last year. The increase is driven by the improved EBITDA, but also a phasing of taxes paid. Cash flow from investing activities ended at minus NOK 62 million, including NOK 31 million in proceeds from the sale of [ Inntrevelro ] and Bookis. CapEx in the quarter ended at NOK 105 million, down NOK 27 million compared to last year. And a clear majority of our CapEx continued to be associated with the ongoing platform transition. And then finally, cash flow from financing activities ended at minus NOK 1.9 billion, impacted by the mentioned share buyback program of NOK 1.4 billion in the quarter and a payout of dividend of around NOK 0.5 billion. In accordance with our principles for capital allocation, we continue to return excess cash to our shareholders. At the Q1 results, we announced a new share buyback program of total NOK 4 billion, split in 2 equal tranches. During the second quarter, as mentioned, we bought back shares for NOK 1.4 billion of the first NOK 2 billion tranche. As of July 10, total share buybacks amount to approximately NOK 1.6 billion, and we expect to complete this tranche during Q3 this year. In May, as we talked about, we paid out an ordinary cash dividend of NOK 2.50 per share, up from NOK 2.25 per share last year. And the total amount is NOK 527 million. At the end of Q2, we had a strong balance sheet with a net cash position of almost NOK 2 billion, and this gives us ample financial headroom to continue the share buyback program in the second half. So wrapping up, I'd like to reiterate that our strategy, our medium-term targets and our capital allocation principles remained unchanged as presented at the CMD in '24. On outlook, in 2026, the vertical revenue outlook remained unchanged from Q1, real estate, jobs and Recommerce to grow in line with the medium-term target and mobility to grow mid- to high single digit. For other HQ, we now expect a revenue reduction in '26 of around NOK 350 million, driven by the termination of TSAs with Schibsted Media and the divestments of noncore assets. As mentioned by Christian, we expect OpEx, excluding COGS to decline by NOK 150 million in '26 versus 2025, up from the previous guidance of around NOK 100 million communicated before. And this reflects the accelerated cost initiatives that we have taken in Q2, while we retain the flexibility to invest into growth, primarily in marketing. And with that, I hand over to Jann-Boje to guide us through the Q&A.

So let me just look here at Microsoft Teams. Already some raised hands. And first in line is Joe from UBS.

So my first question is on professional ARPA growth in mobility in Sweden. You reported 3%, which is only a few percentage points improvement from 1Q, although you obviously increased prices in May. You mentioned the underlying price rises were partly offset by lower voluntary upsell. Can you please quantify the drivers behind this, underlying price versus upsell versus any other factors? Secondly, sort of given the sustained issues here, can you also talk to us about the evolution of the competitive environment in Swedish mobility, please? And then finally, you previously announced you received a notification from the Norwegian tax administration related to that treatment. I think the potential exposure was NOK 500 million. Could you please just update us on that process? Is it still relevant? That would be helpful.

Yes. So on the first question on the professional ARPA, I don't think we can give a lot more flavor, but it is right, as you said, the ARPA growth was 3%. And of course, the underlying price increase was higher than that, but that was offset by lower voluntary spend. For example, the bump ratio went down a fair bit in Sweden as a result. So that is kind of the choices that the car dealers can make in the market. We've seen that also at previous price changes, and it's something that we have been usually been able to, over time, recover through active work with our customers. Then on the second question on competitive situation, I think we still remain in a very strong position in Sweden. Of course, the recovery also strengthened that. We have not seen any, let's say, negative development on the competitive side. [indiscernible] is, of course, there. They now have around 40,000 cars compared to 120,000, 130,000 cars for Blocket. So -- and we are still in, let's say, 17x larger traffic situation than them. So we are in a robust situation competition-wise, I would say.

And then on your third question on the VAT case, there is no new information at this stage.

Maybe just one more comment on the competition. We don't see any substitution effect to Tradera. It's more that some professional car dealers then choose to multihome. They have their ads both on Blocket and Tradera, they're not kind of choosing away.

Okay. Next in line, we have Andrew from Barclays.

Three for me as well, please. First one is on the trend for C2C new listing volumes in Swedish mobility. I think you gave a headline stat of minus 9% for the quarter. But can you give us a sense as to how that has trended through the quarter and give us a sense as to what the exit run rate was in June and ideally for July? And then maybe building on that, it looks like the non-car areas are maybe weaker than in cars. So just give us some color around that. Second question is on your guidance for OpEx ex COGS for the year. state the obvious, it's down more in absolute terms in H1 than you're guiding to for the year. So what are the factors as to why OpEx ex COGS is going to grow in absolute terms in H2? And then third question is on CapEx, which obviously came down in Q2 have been up in Q1. So it's run rating about NOK 245 million for H1. Is that a kind of sensible run rate for the year? And PC, maybe talk us through how you reduce that CapEx to improve cash conversion into 2027?

Yes. So on the private volume side, we have seen a continuous improvement since the transition. Post transition, it was like minus 35%. In Q1, reported minus 26%, I believe. And now we are reporting minus 9%. So it's a clear positive trend. It's hard to say much about July. It's the summer vacation. So I don't think we should draw too much out of that. But we feel that we are on the, let's say, the right trend and the right momentum in this development. And it is also true, as you said, it's better in cars than it is in the subverticals.

Then the question on the OpEx guidance and outlook. Yes, you're correct that we are down a bit around NOK 200 million after 6 months. But remember, there's a lot of phasing last year with first half carrying a lot of TSA costs that we didn't carry in the same extent in the second half. And also the first half last year carried quite significant negative one-offs. So it is quite an easy comparison. And then the other factor, as I was quite clear on, we have also retained flexibility to invest into growth and particularly then in marketing. So that gives you some color on that. And then on CapEx, from our side, CapEx is mostly capitalization of our own people. So as we become a smaller organization, that also carries everything else equal, a lower CapEx level, and we're happy where we are. I think looking ahead, we don't have any new guidance other than the 5% to sales indication from the CMD in '24. So we are working ourselves towards that. And I think we are shooting distance at this point in time.

Thanks for good questions, Andrew. And then next in line is Markus from JPMorgan.

Steve, just to follow up on your marketing comments. Just wanted to understand a bit more how directionally we should think about marketing not only next quarter or next 2 quarters, but also concept. It seems that some of your peers talk about more brand marketing, putting this in sort of like the estimate. Where does stand on this? And again, not only in the next 2 quarters, but more conceptually also longer term, what do you think about brand marketing and where does it go?

Yes. No, thanks for that, Marcus. I'm not going to comment in detail by quarter because we need to have the flexibility to adapt linked to our commercial agenda and also the competitive situation in the different sort of markets and verticals. But we are -- as you also see in Q1, we are investing quite heavily into growing our #1 position in Finland. We are investing, taking the long-term perspective on Blocket, making sure that we recover as soon as we can in Sweden, and you should expect us to continue to do that in the second half as well. And then it's important for us to have the flexibility to increase investments if we find that necessary and not be too limited by a very sort of what becomes our short-term outlook statement for the second half, focusing on an absolute cost level. If we look sort of overall, I think in general, we're quite happy. We've been quite successful on the brand marketing side. We actually see an opportunity to improve both, I would say, on the levels and invest more, but also to get more out of performance marketing. So we're coming a bit from behind, and we're actually building up also organizational capabilities to be a step-up. Around growth marketing.

Thanks. And let's move on to Fredrik from Handelsbanken.

I'm going to keep it to one. I want to come back to the OpEx side. You have been very clear on your ambitions to take the OpEx now down with NOK 150 million. So that's very clear. When you look at the divisions, you have an increase of OpEx of 10% in Mobility and 7% in real estate and 9% in jobs. So what happened in Q2? Was that sort of necessities due to the sort of shift in platforms and more? Or was it temporary staff? Or how should we view that trend we saw in Q2?

Yes. No, thanks for the question, Fredrik. So if you also take us back to Q1 when we gave you a quite sort of detailed breakdown of the FE development into the CMD split by our different verticals and functions, you can see that we actually are operating with more FTEs in our vertical, particularly than in mobility and real estate. Part of that is because those are key investment areas for us on the core classifieds, but we also carry our scaling businesses with C2B models in mobility with NestPil, but also with CASA and Home in real estate. So that is part -- when you look only at the cost picture, you need to bring that into consideration. And then also in the quarter, as I mentioned, we have stepped up on marketing. That will fluctuate from quarter-to-quarter. And -- but Q2 was more than 20% higher in marketing basically across all our verticals. So -- and I commented on that also to Markus' question. So I think that gives you at least some perspective. Yes, I think I'll leave with that.

Maybe one additional comment because you pointed out mobility specifically. And there, the increase in OpEx came from both marketing to support the Blocket recovery, but also personnel costs. And that trend on the personnel cost, that is addressed by the reorganization that we now did in June. So you'll see a different trend in the second half.

Thanks, Fredrik. Then we have Henriette from Danske.

So 2 questions, if I may. The first is the other headquarters EBITDA. Do you think that the current EBITDA level is a suitable estimate for the remainder of '26? And also, could you give any indications of this level for next year? And also, secondly, on mobility on the Denmark professional volumes, can you give any comments on what you have seen on volume in Denmark recently and also expect the time line for dealer behavior to normalize in relation to your guidance?

I can start on other HQ EBITDA, our expectation is the same as before to have a deficit on other HQ on a similar level as we saw in 2025, around NOK 300 million. And I think we -- if I remember correctly, we are around NOK 150 million down after 6 months. So you should expect a similar total development in the second half. We have not given any specific guidance beyond that, but we are working as part of our company simplification and we're becoming smaller, you should also expect over time that the deficit of other HQ will become smaller.

On the professional volume side in Denmark, in Q1, we said that there was an effect both from, let's say, the underlying market and from dealer adaptation to our new model. Now the market has come back. So the volume decline that you see now is purely from the dealer adaptations. We have worked quite a bit with our customers during the quarter. Mostly, we have been focused on, let's say, customer satisfaction. And one key initiative that we have done is to roll out what we call 2 for 1, where you get both, let's say, cash -- or sale for cash and a leasing add at the same time. This is something that the dealers have been very interested in, and we see good pickup of that product. But it's not something that they pay for. The other thing we have been working on, which is bit more longer term is to improve their republishing of ads. So I think that will, over time, also drive some recovery of the volume.