Schibsted News Media AB

Based on the provided annual report excerpts, here's a short financial analysis of Schibsted ASA for the year 2023:

Revenue and Profitability

1. Revenue:

   • Consolidated revenues totaled NOK 15,756 million, a 3% increase compared to the previous year (NOK 15,272 million). This moderate growth reflects steady performance across Schibsted's business segments, notably in Nordic Marketplaces and News Media.

2. Gross Operating Profit (EBITDA):

   • The EBITDA rose by 5% to NOK 2,519 million, up from NOK 2,406 million. This improvement indicates efficient cost management and operational performance despite macroeconomic challenges.

3. Operating Profit:

   • Operating profit reached NOK 1,119 million compared to NOK 1,099 million in the previous year. The slight increase shows stable core business operations.

Segment Performance

1. Nordic Marketplaces:

   • This segment achieved an 11% growth in operating revenue and maintained a robust EBITDA margin of 35%. Key growth was seen in the Mobility, Real Estate, and Recommerce verticals.

2. News Media:

   • Revenue remained flat, but cost reductions improved EBITDA margins to 7.5%. Digital subscription revenues grew by 16%, offsetting declines in casual sales and advertising revenues due to challenging market conditions.

3. Growth & Investments:

   • Achieved a 3% increase in operating revenues with a stable EBITDA margin of 14%. Notable growth in Prisjakt’s revenue by 12% despite market challenges reflects well on the segment's adaptability.

Key Financial Metrics

1. Depreciation and Amortization:

   • Increased to NOK 1,239 million from NOK 1,117 million, primarily due to investments in software, licenses, and right-of-use assets.

2. Impairments and Write-downs:

   • A significant impairment loss on joint ventures and associates, mainly related to Adevinta resulted in NOK -21,694 million.

3. Net Financial Income and Expenses:

   • Financial income was NOK 1,705 million, substantially higher than NOK 117 million the previous year, aided by gains from financial derivatives.
   • Financial expenses increased to NOK -997 million from NOK -830 million, driven by losses on financial instruments and interest expenses.

4. Profit and Earnings Per Share:

   • Basic earnings per share surged to NOK 73.70 from a loss of NOK -96.53 the prior year, although adjusted earnings per share were negative NOK -26.19, indicating underlying profitability challenges.

Cash Flow and Financial Position

1. Cash Flow from Operations:

   • Netted NOK 1,708 million, indicating strong operational cash generation.

2. Cash Flow from Investing Activities:

   • Net cash outflow was NOK 669 million, contrasted with a net inflow of NOK 2,616 million in the previous year, due to reduced investments and strategic sales.

3. Financing Activities:

   • Experienced a net outflow of NOK 3,474 million primarily due to the share buyback program.

4. Liquidity:

   • Cash reserves were NOK 1,279 million with a net interest-bearing debt of NOK 4,372 million. The liquidity reserve included an undrawn revolving credit facility, ensuring financial stability.

5. Equity and Solvency:

   • The equity ratio improved to 76% from 66%, strengthening the balance sheet and indicating robust financial health.

Strategic Moves

1. Adevinta Transaction:

   • Schibsted moved to sell 60% of its Adevinta stake, netting approximately NOK 24 billion in cash while retaining minority investment, positioning the company to leverage future growth in Adevinta.

2. Restructuring:

   • Announced the potential separation of its news media operations to create two focused entities, which should unlock value and better align with market dynamics.

Outlook

Schibsted aims to continue focusing on operational efficiencies and growth via its digital transition, particularly in Nordic Marketplaces and News Media, amidst macroeconomic uncertainties. Major strategic transactions and investments are expected to shape future performance positively.

Conclusion

Schibsted's 2023 performance reflects effective management and strategic decision-making, stabilizing revenues, and improving profitability and cash flow despite a complex macroeconomic environment. The company's solid balance sheet, coupled with ongoing investments and restructuring initiatives, positions it well for future growth and value creation.