Norwegian classifieds ad giant Adevinta posted somewhat weaker-than-expected growth in the third quarter.
Adevinta, which includes international digital marketplaces such as eBay, Revenue increased to 386 million euros (NOK 3.9 billion) in the third quarter, up from NOK 171 million at the same time last year.
Total operating profit (ebitda) rose to 127 million euros from 54 million in the third quarter of last year.
Up front, revenue was forecast at €407.6 million (just over 4.1 billion kroner) with total operating profit (ebitda) of €131.9 million, according to Bloomberg.
At the same time, the company said it will now focus on five core markets, namely Germany, France, Spain, Benelux and Italy, while leaving Australia and South Africa. Adevinta expects sales to begin in the latter countries in early 2022.
In Australia, Adevinta owns Gumtree, Autotrader and Carsguide markets, and in South Africa there is talk of Gumtree.
For the international markets, which also include Canada, Mexico and Brazil, as well as Australia and South Africa, there was a 4 percent decline in revenue in the quarter to €47 million.
Other Adevinta markets are still under strategic consideration.
For core areas, the medium to long-term goals are annual revenue growth of 15 percent, with an operating margin of 40 to 45 percent.
Weak car markets
Revenue continued to grow in the third quarter, with core markets up 6 percent year over year. The lower growth rates compared to the first half of the year reflect a combination of the post-pandemic improvement seen in the third quarter of 2020 and lower levels of activity this summer after restrictions were lifted in most markets, as well as the current global downturn we are seeing in the auto market, says Adevinta CEO Rolv Erik Ryssdal in stock exchange announcement.
– We expect revenue growth to accelerate in the fourth quarter, with the exception of mobile.de (German auto site, journal.anm.), he adds.
In the short term, Adevinta’s auto markets will continue to be affected by lower volumes in used car sales, which is largely due to a global chip shortage reducing production of new cars.
We expect supply pressure to act as a brake on growth until mid-2022,
Especially for mobile.de, as the revenue model at this point is mainly related to the size of the listing, the company wrote, but emphasizes that the core elements of the mobile.de business remain strong, with high demand.
In the second half of 2022, the company expects a gradual improvement in the auto market, with the core markets coming in with low double-digit growth.
Adevinta separated from Schibsted in 2019 and is the fourth largest company on the Oslo Stock Exchange with a market capitalization of nearly NOK 145 billion.
The company is holding a capital market day on November 30, after which it will present the strategy and financial goals.
E24 is a subsidiary of the Schibsted Group, which is the largest owner in Adevinta. Some E24 journalists own stock in Schibsted, by participating in the group’s employee stock savings program. Some of these may also have shares in Adevinta, following the company’s separation from Schibsted in 2019.
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