Adevinta revamps growth strategy as third quarter lags behind car issues

  • Q3 revenue 386 million euros vs survey 406 million
  • EBITDA 127 million euros vs 136 million survey
  • Completed eBay classifieds unit purchase in June
  • Set new growth, margin targets
  • Equities down 5.9%

OSLO, Nov. 25 (Reuters) – Norway’s Adevinta (ADEA.OL), the world’s largest classifieds company, reported a smaller than expected third-quarter revenue increase on Thursday, hampered by weakness of the automotive segment, according to her. will continue next year.

Following its recent $ 13 billion buyout of eBay’s classifieds unit (EBAY.O), Adevinta said it now plans to focus its business in fewer countries, primarily in Europe, and would invest more in these markets to stimulate growth.

Adevinta’s revenue from July through September rose 6% year-on-year to 386 million euros ($ 432.7 million), behind analysts’ average forecast of 406 million euros, according to the reports. data from Refinitiv.

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The company’s shares fell 5.9% at 8:06 a.m. GMT.

A semiconductor shortage has limited global auto production this year, hampering sales and, therefore, advertising. Adevinta’s German unit, Mobile.de, reported a 3% drop in revenue in the third quarter compared to last year.

Adevinta’s profit before interest, taxes, depreciation and amortization (EBITDA) fell 7% year-on-year to € 127 million in the third quarter, behind the € 136 million expected by analysts, according to Refinitiv .

The company set itself a medium to long-term growth target of 15% on Thursday, but said that target would not be met next year.

“In 2022, assuming a gradual recovery in the engine market in the second half of the year, we forecast double-digit core market revenue growth,” Adevinta said in its earnings report.

Adevinta now plans to focus on five European markets – Germany, France, Italy, Spain and the Benelux countries – and divest its operations in Australia and South Africa next year.

“These are markets where we have strong positions and where we see opportunities for faster growth,” Rolv CEO Erik Ryssdal told Reuters.

“Canada, Mexico, Hungary and Belarus have come under scrutiny. These are smaller operations, but we need more time to conclude,” he said.

However, Adevinta will retain its joint ventures in Brazil, Austria and Ireland. It has set itself a medium and long-term objective of an EBITDA margin of 40 to 45%, compared to 33% in the third quarter.

($ 1 = 0.8920 euros)

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Reporting by Terje Solsvik; edited by Uttaresh.V and Emelia Sithole-Matarise

Our standards: Thomson Reuters Trust Principles.


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