When it comes to Adevinta‘s second quarter report, it’s hard not to look for signs that the company is close to buying EBay’s classified holdings.

Depending on your read of the situation, the company’s Q2 reports offers either hints at an acquisition or signs that the company is no longer interested. The report mentions “further portfolio optimizations and large scale consolidation” as one of Adevinta´s focus areas — a sign that the company is perhaps planning a major acquisition. Then you have the financial information: Adevinta had cash and cash equivalents of €308 million at the end of June, as well as an undrawn revolving credit facility of €400 million. Also a good sign.

But the report also notes that company has fairly limited leverage following Grupo Zap acquisition in Brazil. This could mean that if Adevinta ends up going in on the sale of EBay’s classifieds holdings, it will either be as part of a consortium or only for breakaway parts.

Cost-cutting leads to successful turnaround in France

Getting back on a pre-pandemic track has been Adevinta’s goal ever since countrywide lockdowns significantly hampered its business. France is perhaps the best example of that turnaround — Adevinta’s operations in the country saw positive revenue in June, a sign of a larger upswing.

“Looking ahead, we expect our recovery to continue with positive growth in France and further improvements in other countries in the second half of the year and beyond,” said CEO Rolv Erik Ryssdal.

Even Brazil is getting back on its feet. “We saw great developments in traffic and liquidity from mid-May reaching an all-time high in daily active users,” Adevinta wrote in the quarterly report.

LeBonCoin, Adevinta’s main France-based holding, was behind most of the uptick. Because of its dominance in the country, it carried almost all of Adevinta’s EBITDA for the quarter. LeBonCoin pulled in €40.8 million in EBITDA, 96% of the €42.5 million Adevinta earned in the second quarter. At the same time, LeBonCoin only accounted for 59% of the company’s Q2 revenue.

LeBonCoin’s strong performance led Adevinta to outpace analysts’s expectations for the company. On average, they expected Adevinta to pull in around €23 million — the highest estimate was just €28 million. But, despite losing 16% of its operating revenue, Adevinta only lost 15% of its EBITDA, which left it at an EBITDA margin of 27% — the same as the previous year.

Despite the upturn in several markets, Q2 has been a tough period for Adevinta marked by massive revenue losses. In Brazil, revenue was down 34%, while revenue in Spain plummeted 28% year-on-year. Global Markets were down 23%, the company said. The company did note that many of its investments in the Global Markets portfolio were in the “investment phase” and weren’t expected to turn a profit. Nonetheless, if it weren’t for France pulling its weight, Adevinta would have been in big trouble.

What was clear from the report and earnings call was that centralization is a key part of Adevinta’s strategy. That does not mean Adevinta will continue to run all of its “investment phase” money losers. Less than a month ago, it sold Corotos, its online marketplace in the Dominican Republic, to local entrepreneurs. Its holdings in Chile are also money losers, so it’s not unlikely that those assets will be on the chopping block soon.

When it came to new acquisitions, however, the company was conspicuously silent.

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