Schibsted Group (OSE: SCH) fourth quarter revenue climbed 4% year-on-year to 3.74 billion NOK. Operating profit headline number slid ten-fold to 184 million but 2010 Q4 had a major one-off gain. Fourth quarter 2011 on the other hand had 179 million in impairment losses. Net profit came in at 42 milllion meaning an EPS of 0.32 NOK.
Full-year revenues for 2011 approached 14.4 billion and operating profit came to 1.44 billion. Net profit 832 million and EPS exactly 7 NOK (adjusted EPS 8.76). Fourth quarter numbers also include a 202 million charge on restructuring. The aim is to reduce cost base by about 200 million in 2012-2014 with main effect coming this year.
Offline advertising, mainly in subscription paid newspapers and single copy sold newspapers such as one of the largest Nordic newspapers Aftonbladet and Svenska Dagbladet in Sweden and two of the largest newspapers in Norway Aftenposten and Verdens Gang ,contributed 46% to EBITDA. Both offline advertising and prices paid on subscription and single-copy newspapers contributed approximately 1 billion into Q4 revenues.
For online classifieds near 900 million NOK revenue 150 million came from France with leboncoin.fr (72% EBITDA margin) and similar amount from Sweden (blocket.se, BytBil.com, adjusted for leboncoin license fee margin was 55%). Adds in Norwegian online websites (e.g. Finn.no) contributed about 275 million with a 43% EBITDA margin. Online classifieds contributed 37% into the group’s EBITDA, growing robustly. Paid online products showed some progress. Aftonbladet Plus web premium content is the most succesfull of those. Sales of iPad products are still very limited.
Norwegian units will be gathered under same management and the unit will be called Schibsted Norge. Operations in Oslo will be focused in one building. The aim is to reinforce digital development, streamline the organization and strengthen the company’s impact in national advertising.
Schibsted is planning to further strengthen capital position with bond issuing particularly given the attractive domestic bond market condition. The group said it received a “shadow-rating” of BBB from the issuer banks (it has no formal credit rating). Current net interest bearing debt is 1.64 billion and NIBD/EBITDA 0.8 at the end of 2011. The Board suggests a dividend increase to 3.5 NOK a share for 2011.
The global economic situation causes uncertainty in advertising markets. Schibsted feels that online advertising is relatively resistant to cyclical fluctuations and should increase its relative market share. Traditional advertising development is more closely tied to cyclical trend. Despite some price increases a weak development is expected to continue in newspaper sales, with subscription based newspapers holding up better. The stock has gained over 6% to trade above 185 NOK in a negative market as the numbers were considerably better than expected.
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