Until late last night the Schibsted A share had a bad week – falling from NOK 200 to 193. But, then it woke up and showed some strength before this morning’s presentation of the Q3 results. When the results arrived, it was clear why the share price had perked up in the previous hours: Schibsted had its “best third quarter ever”, according to CEO Rolv Erik Ryssdal.

“In Q3 of FY2016 Schibsted reported its highest gross operating profit ever. Thanks to continuing revenue growth, improved profitability margins in the online classifieds operations, online growth and significant cost reductions in the media houses,” said Ryssdal (here is the news release).

Schibsted will present the numbers to analysts later today. AIM Group will cover the presentation and report in the course of today. We will also tell you how a minority owner of Finn.no had cut its valuation of the Finn business.

An exciting day awaits Schibsted and its share. In the year to date, the A share price has dropped 33 percent. Let’s see if CEO Ryssdal can convince the market today.

Here is the news release (unedited):

Schibsted ASA (SCHA/SCHB) – Interim Financial Statement Q3 2016

Today, Schibsted Media Group released its Q3 2016 report. EBITDA ex. Investment phase increased 13 percent to NOK 756 million.

“In Q3 2016 Schibsted reported its highest ever gross operating profit number for a third quarter. This was a result of continuing revenue growth and improved profitability margins in the online classifieds operations as well as online growth and significant cost reductions in the media houses”, CEO Rolv Erik Ryssdal says.

“In online classifieds, we see continued high growth rates in France and steady high single digit growth in Scandinavia. As previously communicated, the growth in Spain has slowed down as a result of economical conditions. Other developed operations, like Italy, Austria and Ireland are all growing well, and producing positive EBITDA for the second consecutive quarter”, Rolv Erik Ryssdal says.

“It is particularly pleasing to see that the operations in emerging markets, for example in Brazil, are showing great progress in terms of monetization. The combined losses in our joint venture operations in investment phase are reduced with more than 75 percent since Q3 2015. In Europe, our native app Shpock is repetitively setting new records in terms of traffic and engagement, and producing good return on the investments made there”, Rolv Erik Ryssdal says.

“Schibsted’s build-up of product and technology capabilities is progressing well, and new products and functionalities are being introduced regularly. In Q3, our new advertising platform was ramped further up, and within online classifieds, centrally developed components, like messaging functionality for marketplace apps, are being rolled out across our portfolio. Also, our next generation classifieds platform was launched in the first test market, Greece”, Rolv Erik Ryssdal says.

“Our newspapers in Norway and Sweden continue to face negative revenue development driven by rapid decline in print advertising. In Q3 we have managed to adapt the cost base fast enough to increase the EBITDA margin. It is also encouraging to see the number of digital subscribers growing rapidly. We believe this will be an important revenue driver for quality media in the future”, Rolv Erik Ryssdal says.

“The operations in Schibsted Growth continue to develop well. This goes for both personal finance sites, like Lendo, and price comparison”, CEO Rolv Erik Ryssdal says.

Highlights in Q3 of FY2016 (edited by us)

+ EBITDA (excluding Investment phase sites) of NOK 756 million (growth of 13 percent from Q3 of FY2015);
+ Total online classifieds EBITDA (excl. investment phase sites) grew 20 percent to NOK 670 million;
+ Continued positive high growth for online classifieds in developed phase;
+ Solid revenue growth and stable margins in France, where monetization of the jobs vertical will start in Q4 of FY2016;
+ Sustained growth in Norway, and continued strong momentum in Sweden;
+ Eight percent revenue growth in Spain, which is slower primarily because of lower display advertising growth;
+ 20 percent revenue growth and positive EBITDA in “other operations in developed phase”, driven by continued good development in Italy, Austria and Ireland;
+ Online classifieds in investment phase continue their positive trend;
+ Their revenue growth accelerated to 69 percent;
+ Reduced investment spend in emerging markets;
+ OLX Brazil progressing well, with rapid revenue growth and reduced expenses;
+ Significant investment and rapid growth in U.K. and Germany for native app Shpock;
+ Tight cost control leads to improved EBITDA in media houses, even if advertising markets are challenging;
+ Strong inflow of digital subscribers;
+ The build-up of product and technology competence continues. New products and functionalities launched in Q3, such as the next-generation online classifieds platform (launched in Greece) and the further ramping up of Schibsted’s new advertising platform;
+ Acquisition of MB Diffusion, the leading online classifieds marketplace for agricultural and construction equipment in France, was announced.

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