The classifieds group Adevinta has this morning released its Q3 results the headlines from which include a revenue increase of 1.6% and a 5% boost in revenue generated from online classifieds. The results represent something of a recovery from Adevinta’s heavily covid impacted results of Q2 and are likely to be reflected by many classifieds companies’ Q3 results in the next week or so.
Other highlights of Adevinta’s Q3 results include an EBITDA margin up 120bps year-on-year, largely due to cost-saving initiatives and one-off positives such as the sale of three leading brands to Frontier Digital Ventures, and what today’s press release calls “attractive” financing conditions and “refinancing of Adevinta’s debt” ahead of the eBay Classifieds deal. While EBITDA for France (4%) and Brazil (11%) were up for the quarter year-on-year, Adevinta’s other reported segments were down for the quarter (Spain down by -7% and Global Markets down by -9%). Commenting on his company’s results, Adevinta CEO Rolv Erik Ryssdal said:
“As expected, Q3 performance confirmed the trend that we had seen throughout Q2, with improving momentum in operational KPIs, translating into revenues. We posted positive growth in the quarter. We continued to implement strong cost saving initiatives throughout the quarter and benefited from the phase-out of expenses, driving exceptional year-on-year growth in EBITDA margin despite the dilutive impact of acquisitions. We expect Q4 profitability to reflect the catch up and acceleration of investment in marketing and product and technology, while remaining confident in our longer-term EBITDA margin improvement potential.”
The third quarter of 2020 was also very significant for Adevinta as it is set to not only complete the acquisition of Grupo ZAP to dominate the Brazilian market (via a joint venture with Prosus), but also because it won the race to acquire eBay Classifieds in a $9.2 billion dollar deal. It is this deal which is expected to create the world’s leading classifieds group according to Ryssdal:
“I am truly excited that we reached in July an agreement to acquire eBay Classifieds Group. This transaction will create the world’s leading online classifieds company with the most diversified and complementary portfolio of marketplaces across the globe. Following the acquisition we will benefit from number 1 market positions across 17 countries, covering 1 billion people and we will be uniquely positioned to accelerate the growth and development of our markets. It will allow us to create more value in the years to come through the combination of best-in-class assets and expertise and through the generation of substantial and sustainable synergies.”
Although the announcement of the eBay deal caused Adevinta shares to jump from around €9.3 per share to €14.5 when it was announced back in July, today’s Q3 announcement is yet to move the needle with regards to share price with the stock (ADE:OSLO) currently trading at €14.26.