Adevinta ASA (ADE) – Adevinta reports full year 2022 results with strong Q4 2022 performance in soft macroeconomic environment

• All full year 2022 targets achieved despite market headwinds
• Full year 2022 Core markets revenue growth of 10% and Group underlying EBITDA of €579m
• Successful execution of strategy in 2022, with portfolio optimisation review completed, business integration on track and strong focus on operational excellence
• Further strong core markets revenue growth in Q4 2022: +13% year-on-year
• Q4 2022 EBITDA margin of 33.6%, up 2pp year-on-year, despite French DST impact and business mix evolution
• €1.7bn impairment loss, essentially goodwill adjustment due to macro-driven changes in WACC assumptions
• 2023 outlook: low double digit Core Markets revenue growth; Group reported EBITDA in the range of €620m to €650m
• Long-Term ambition for Core markets: 2023-2026 annual revenue growth between 11% and 15%; 2026 EBITDA margin between 40% and 45%
• Announcement of CFO transition: Uvashni Raman to leave the business during the course of 2023

Oslo, 23 February 2023 - Adevinta ASA (ADE) (“Adevinta” or “the Company”) reported a strong 2022 financial performance despite market headwinds and delivered on all its financial targets. Revenue growth was 10% for Core markets, and total revenues were up 8% year-on-year at 1,644 million euros. Group underlying EBITDA¹ reached 579 million euros, in line with the full year guidance, despite the negative impact of the French Digital Service Tax. The cash flow generation generation of the period was really strong, at 437 millions euros. 

For the fourth quarter of 2022 Adevinta reported Core Markets revenues of 393 million euros, representing a strong 13% growth, accelerating quarter after quarter despite the continued supply softness in the Mobility segment and the weaker market environment:

• Online classifieds revenues improved by 15%, supported by double-digit revenue growth in Mobility which benefited from successful price increases implemented during the year, the recovery of dealer listings at Mobile.de, driven by lower demand, and high value added product development both for users and car dealers. Real Estate performance remained steady, with high single digit growth in the period. Jobs continued to perform strongly, despite lapping tougher comps in Spain; 
• Transactional revenues grew by 60% year-on-year, with strong revenue growth in all Core markets;
• Advertising revenues were down 5% year-on-year, as a result of an overall weaker advertising market, especially in automotive display advertising.

Gross operating profit (reported EBITDA) amounted to 145 million euros, up 16% year-on-year, representing a 33.6% margin. 

This was the result of (i) the positive topline evolution, (ii) lower marketing investment, driven by different phasing, spend discipline and prioritisation, (iii) cost management in the current market context, and (iv) a lower impact from share-based compensation. 

This was partly offset by (i) the continued scaled build-up of global capabilities with the implementation of new operating models for support functions and Product and Technology teams, and to accelerate new business model development and value creation, (ii) higher direct costs from transactional services, in line with the adoption of the service and revenue growth, and (iii) the (3) million euro provision booked related to the French DST.

Excluding the impact from the French digital services tax legislation (DST), EBITDA improved by 18%, to 147 million euros compared to the fourth quarter of 2021, representing a 34.2% margin.

Antoine Jouteau, CEO Adevinta: “2022 was a pivotal year for Adevinta as we achieved all our financial goals for 2022, despite a challenging environment. After completing the acquisition of eCG in 2021, we focused on executing a successful integration of the business and advancing our Growing at Scale strategy. We announced a new leadership team and structure with responsibilities aligned to deliver on our strategy, and completed our integration roadmap with the implementation of new operating models for our global functions. We successfully developed and launched new features and products for the benefit of our users and clients, while maintaining our commitment to financial discipline.”

Highlights of Q4 2022

All FY 2022 targets achieved despite market headwinds

Core markets revenue growth of 10% and total revenues up 8% yoy at €1,644m

Underlying EBITDA¹ of €579m, including the €(12)m impact of the French DST, reported EBITDA of €548m at 33.3% margin

More than €35m of run-rate synergies delivered

Strong cash flow generation² of €437m and continuous debt reduction throughout the year

Successful execution of our Growing at Scale strategy

2022 portfolio optimisation review completed, with launch of sale process for Hungary

Business integration on track, with main milestones implemented in 2022: major systems rollouts, exit of TSAs, new operating models in support functions…

Strong focus on operational excellence, with:

• Increased monetisation of Mobility and Real Estate verticals, along with product improvements and increased added-value for customers
• Continued rapid scaling and product launches, eg in transactional services
• Strong financial discipline

Strong Q4 2022 results performance in a soft macro environment

Further strong core markets revenue growth : +13% year-on-year, driven by outstanding performance at Mobile.de

• Steady double digit growth in Classifieds (+15%), with strong performance in Mobility (+19%) and Real Estate (+9%) while Jobs remained dynamic (+5%),
• Consumer Goods transaction revenues growth up +60% yoy, with strong revenue growth in all Core markets 
• Advertising revenues down 5% yoy
• Total revenue up 9% yoy, at €431m

Reported EBITDA margin of 33.6%, up 2pp yoy, despite French DST impact and business mix evolution - Total consolidated EBITDA of €145m 

€1.7bn impairment loss to the book value of eCG assets and Hungary, reflecting: 

• Global increases in WACC driven by increase in interest and risk free rates
• High share-price driven book value at closing of eCG transaction (+48% vs signing price)
• More conservative expected growth trajectory in Canada and Hungary
• Offset by better mid-long term business outlook for German assets 

Outlook

2023 outlook

• Low double digit Core Markets revenue growth 
• Reported EBITDA in the range of €620m to €650m, reflecting year-on-year improvement in EBITDA margin despite mix evolution
• Leverage reduced to below 3x net debt/EBITDA by year end

Long-Term ambition for Core markets 

• 2023-2026 annual revenue growth between 11% and 15%
• 2026 EBITDA margin: 40-45%