Schibsted (Sell, TP: NOK270.00) - All eyes on spin-off
All eyes on spin-off Near-term focus remains on the Adevinta spin-off, which is set for 10 April. We continue to find Schibsted’s implicit valuation based on the proposed valuation range rich relative to its growth prospects, and we reiterate our SELL and NOK270 target price. For Q1 (results due at 07:00 CET on 15 May) we expect EBITDA of NOK800m (NOK378m Adevinta, NOK421m Schibsted). Q1 preview. We forecast Q1 EBITDA (excluding JVs) of NOK800m (consensus NOK836m), comprising NOK378m for ‘new’ Schibsted and NOK421m for Adevinta (EUR43m). For Adevinta, we forecast EBITDA including a proportionate share of JVs and excluding investment phase costs of NOK472m (EUR48.4m). Adevinta – soft display advertising masks positive trend in classifieds. Adevinta has guided for 14% revenue growth (including JVs) for the first two months of 2019. Relative to its long-term guidance of 15–20% this reflects soft display advertising, while we expect continued growth in key classified sites (France, Spain and Brazil). For France we expect an average 15% price increase to offset lower volumes. Schibsted – strong performance from Finn offset by Lendo and Blocket. We expect a continued positive trend for Finn supported by positive Easter timing effects, to be offset by weak performance by Lendo and Blocket. Estimate revisions. We have lowered our EBITDA forecasts by 5% for 2019 and 3% for 2020, primarily to reflect higher than expected HQ costs and product and tech spend for Adevinta and the guided NOK70m–100m expansion cost for Lendo. Valuation looks unattractive: SELL and NOK270 target price reiterated. At the proposed Adevinta offer price of NOK70–82/share, Adevinta would be trading at a 2019e EV/EBITDA of 27–31x (or 24.5–28.6x excluding the value of JVs and investment phase spending). This compares to the peer group average of 17.1x. Furthermore, we find the implied 2019e EV/EBITDA for Schibsted of 12.1–16.7x rich relative to its growth prospects. In comparison, Axel Springer (which has similar growth characteristics) is trading at 9x.Schibsted is engaged in the media industry and has four segments: Online classifieds, which include the Norwegian online marketplace and operations outside Norway; Schibsted Norge media house, which includes the media houses VG, Aftenposten, Bergens Tidende, Stavanger Aftenblad and Faedrelandsvennen, printing and distribution operations, and the publishing house Schibsted Forlag; Schibsted Sverige media house, which includes media houses Aftonbladet and Svenska Dagbladet and a portfolio of internet-based growth companies; and Media Houses International, which includes of free newspapers 20 Minutes in Spain and France and Eesti Meedia Group comprising of operations in the Baltic States.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.